OUR VALUES
Independence Over a hundred years ago,
The Times pledged “to give the news impartially,
without fear or favor, regardless of party, sect or
interests involved.” That commitment remains
true today: We follow the truth, wherever it leads.
Integrity The trust of our readers is essential.
We renew that trust every day through the
actions and judgment of all our employees — in our
journalism, in our workplace and in public.
Curiosity Open-minded inquiry is at the
heart of our mission. In all our work, we believe
in continually asking questions, seeking out
different perspectives and searching for better
ways of doing things.
Respect We help a global audience understand
a vast and diverse world. To do that fully and
fairly, we treat our subjects, our readers and each
other with empathy and respect.
Collaboration It takes creativity and
expertise from people in every part of the company
to fulfill our mission. We are at our best when
we work together and support each other.
Excellence We aim to set the standard in
everything we do. The pursuit of excellence takes
different forms, but in every context, we strive
to deliver the very best.
620 Eighth Avenue
New York, N.Y. 10018
Tel 212 556 1234
The New York Times Company
2018 Annual Report
OUR MISSION
We seek the truth
and help people
understand the world.
This mission is rooted in our belief that great
journalism has the power to make each reader’s
life richer and more fulfilling, and all of society
stronger and more just.
The New York Times Company in Numbers in 2018
4+ million paid
subscriptions to
our products.
630 SPEAKING
ENGAGEMENTS
FEATURING
TIMES EXPERTS.
54
“Overlooked” obituaries
published, highlighting
the lives of notable
women and minorities
overlooked throughout
the years.
1,550
journalists on
staff across news
and opinion.
1.93 MILLION
DOWNLOADS OF
“THE DAILY”
PODCAST EPISODE
“THE BLASEY-
KAVANAUGH
HEARING.”
55,000+
stories and
50,000,000+
words
published.
18,615 cities and
towns looked
up by readers in
the feature “How
much hotter is
your hometown
than when you
were born?”
195
fourth graders
wrote opinions for
The New York Times
For Kids section.
200+ journalists
based outside
the United States
in 31 bureaus.
500 reviews
and 4,000 hours
spent testing
over 2,100
products at
Wirecutter
(including 200
headphones).
160+
countries from which
we reported.
STORIES
PUBLISHED IN
11 LANGUAGES.
TO OUR
SHAREHOLDERS,
After a year of great progress and accelerated transformation, The New York Times Company begins 2019
with the wind at our backs.
The Company’s commitment to investing in journalism and upholding traditional journalistic values and our
continuing focus on sweeping digital innovation has helped us create a sustainable business model for news.
Today The New York Times is a leading global news provider and among the world’s most successful news
subscription businesses.
The foundation of our mission, our strategy and our offer to every subscriber is high-quality journalism. That
is why we have consistently invested in our newsroom and it is why we plan to further invest in 2019.
Last year we had 1,550 journalists on staff and they spent time in more than 160 countries covering
the world.
As a result, it was another exceptional year for Times journalism, from breaking news coverage of school
shootings, wildfires, hurricanes and populist uprisings around the globe to extraordinary reporting on
climate change, technology and the constant stream of news from Washington, D.C.
Our newsroom once again produced a significant volume of impactful work. Our groundbreaking “Me Too”
reporting continued this year, with dozens of investigations into sexual misconduct — from factory floors
to mega-churches to the opera house — and we launched investigations into Facebook and Cambridge
Analytica that sparked a global conversation about the misuse of personal data. And our Opinion
department published one of the most talked about Op-Eds last year, from an anonymous member of the
Trump administration.
All this journalism was very good for our business. 2018 saw us push our digital progress forward — we
added 716,000 net new digital-only subscriptions during the year. Solid execution of our strategy has helped
grow our total subscriptions — including our Cooking, Crossword and print products — to over 4.3 million,
far more than any other news organization in the United States.
And we believe there is the possibility for much more growth ahead. In 2015 we set ourselves the challenge
of doubling our digital revenue from around $400 million to $800 million by the end of 2020. The end of 2018
was the three-year mark in this five-year journey and we generated $709 million in total digital revenue,
three quarters of the way to achieving our target.
So we’ve set a new ambitious goal: reaching at least 10 million subscriptions by 2025. We envision a world
where every reader believes quality journalism is worth paying for, and we can see an increasingly clear
path toward that ambition. Our recent success in scaling our digital business along with our analysis of the
market opportunity in the U.S. and around the world give us great confidence.
This past year saw us lean in to a different approach to digital advertising. Our focus now is on large-scale
partnerships with the world’s leading brands. In print we saw advertising declines moderate in 2018, and
we believe our quality print products and the consumers they attract remain very appealing to marketers.
2018 AnnuAl RepoRt
Creativity and innovation continue to transform the way people think about The New York Times. Last year
saw the continued strength of “The Daily,” our smash-hit podcast, which was Apple’s most downloaded
podcast in 2018. And we’re not letting up on exploring new ways of telling the most important stories of
the day and meeting the needs of our audience in every form, from the written word to visual to audio to
television to streaming.
To that end, we announced last year our ambitious new television program, “The Weekly,” which will
premiere in June 2019 and air in the U.S. on the cable network FX and the streaming service Hulu.
Looking ahead, we will continue to invest in our journalism and product innovation that will help us scale
our business further and support future growth and profitability.
We thank you for your continued support.
Mark Thompson
President and C.E.O.
March 20, 2019
2018 AnnuAl RepoRt
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 30, 2018
Commission file number 1-5837
THE NEW YORK TIMES COMPANY
(Exact name of registrant as specified in its charter)
New York
(State or other jurisdiction of
incorporation or organization)
620 Eighth Avenue, New York, N.Y.
(Address of principal executive offices)
13-1102020
(I.R.S. Employer
Identification No.)
10018
(Zip code)
Registrant’s telephone number, including area code: (212) 556-1234
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Class A Common Stock of $.10 par value
Name of each exchange on which registered
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: Not Applicable
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes
No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Exchange Act. Yes
No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes
No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to
be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files).
Yes
No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer,
a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated
filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
Non-accelerated filer
Accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by the check mark if the registrant has elected not to use the extended
transition period for complying with any new or revised financial accounting standards provided pursuant to section
13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes
No
The aggregate worldwide market value of Class A Common Stock held by non-affiliates, based on the closing price
on June 29, 2018, the last business day of the registrant’s most recently completed second quarter, as reported on the New
York Stock Exchange, was approximately $4.1 billion. As of such date, non-affiliates held 59,776 shares of Class B
Common Stock. There is no active market for such stock.
The number of outstanding shares of each class of the registrant’s common stock as of February 21, 2019 (exclusive
of treasury shares), was as follows: 165,113,286 shares of Class A Common Stock and 803,408 shares of Class B Common
Stock.
Documents incorporated by reference
Portions of the Proxy Statement relating to the registrant’s 2019 Annual Meeting of Stockholders, to be held on
May 2, 2019, are incorporated by reference into Part III of this report.
INDEX TO THE NEW YORK TIMES COMPANY 2018 ANNUAL REPORT ON FORM 10-K
ITEM NO.
PART I
Forward-Looking Statements
Business
1
Overview
Products
Subscriptions and Audience
Advertising
Competition
Other Businesses
Print Production and Distribution
Raw Materials
Employees and Labor Relations
Available Information
1A Risk Factors
1B Unresolved Staff Comments
2
3
Properties
Legal Proceedings
4 Mine Safety Disclosures
Executive Officers of the Registrant
PART II
5 Market for the Registrant’s Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities
6
Selected Financial Data
7 Management’s Discussion and Analysis of
Financial Condition and Results of Operations
7A Quantitative and Qualitative Disclosures About Market Risk
8
9
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
9A Controls and Procedures
9B Other Information
PART III
10 Directors, Executive Officers and Corporate Governance
11
12
Executive Compensation
Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
13 Certain Relationships and Related Transactions, and Director Independence
14
Principal Accountant Fees and Services
PART IV
15
16
Exhibits and Financial Statement Schedules
Form 10-K Summary
Signatures
1
1
1
2
2
3
4
4
5
5
5
6
7
16
16
16
16
17
18
20
24
52
53
116
116
116
117
117
117
118
118
119
121
122
PART I
FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K, including the sections titled “Item 1A — Risk Factors” and “Item 7 —
Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking
statements that relate to future events or our future financial performance. We may also make written and oral
forward-looking statements in our Securities and Exchange Commission (“SEC”) filings and otherwise. We have
tried, where possible, to identify such statements by using words such as “believe,” “expect,” “intend,” “estimate,”
“anticipate,” “will,” “could,” “project,” “plan” and similar expressions in connection with any discussion of future
operating or financial performance. Any forward-looking statements are and will be based upon our then-current
expectations, estimates and assumptions regarding future events and are applicable only as of the dates of such
statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual results
to differ materially from those anticipated in any such statements. You should bear this in mind as you consider
forward-looking statements. Factors that we think could, individually or in the aggregate, cause our actual results to
differ materially from expected and historical results include those described in “Item 1A — Risk Factors” below, as
well as other risks and factors identified from time to time in our SEC filings.
ITEM 1. BUSINESS
OVERVIEW
The New York Times Company (the “Company”) was incorporated on August 26, 1896, under the laws of the
State of New York. The Company and its consolidated subsidiaries are referred to collectively in this Annual Report
on Form 10-K as “we,” “our” and “us.”
We are a global media organization focused on creating, collecting and distributing high-quality news and
information. Our continued commitment to premium content and journalistic excellence makes The New York Times
brand a trusted source of news and information for readers and viewers across various platforms. Recognized widely
for the quality of our reporting and content, our publications have been awarded many industry and peer accolades,
including 125 Pulitzer Prizes and citations, more than any other news organization.
The Company includes newspapers, print and digital products and related businesses. We have one reportable
segment with businesses that include:
• our newspaper, The New York Times (“The Times”);
• our websites, including NYTimes.com;
• our mobile applications, including The Times’s core news applications, as well as interest-specific
applications, including our Crossword and Cooking products; and
•
related businesses, such as our licensing division; our digital marketing agencies; our product review and
recommendation website, Wirecutter; our commercial printing operations; NYT Live (our live events
business); and other products and services under The Times brand.
We generate revenues principally from subscriptions and advertising. Subscription revenues consist of revenues
from subscriptions to our print and digital products (which include our news products, as well as our Crossword and
Cooking products) and single-copy sales of our print newspaper. Advertising revenue is derived from the sale of our
advertising products and services on our print and digital platforms. Revenue information for the Company appears
under “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Revenues, operating profit and identifiable assets of our foreign operations each represent less than 10% of our total
revenues, operating profit and identifiable assets.
During 2018, we continued to make significant investments in our journalism, while taking further steps to
position our organization to operate more efficiently in a digital environment. The Times continued to break stories
and produce investigative reports that sparked global conversations on wide-ranging topics. We launched
THE NEW YORK TIMES COMPANY – P. 1
groundbreaking digital journalism projects and new news and opinion podcasts that complement The Daily, our
news podcast that launched in 2017 and was the most downloaded podcast on Apple’s iTunes in 2018. We also
announced the creation of a new television show, “The Weekly,” which will begin airing in mid-2019. In addition, we
continued to create innovative digital advertising solutions across our platforms and expand our creative services
offerings.
We believe that the significant growth over the last year in subscriptions to our products demonstrates the
success of our “subscription-first” strategy and the willingness of our readers to pay for high-quality journalism. We
had approximately 4.3 million subscriptions to our products as of December 30, 2018, more than at any point in our
history.
PRODUCTS
The Company’s principal business consists of distributing content generated by our newsroom through our
digital and print platforms. In addition, we distribute selected content on third-party platforms.
Our core news website, NYTimes.com, was launched in 1996. Since 2011, we have charged consumers for
content provided on this website and our core news mobile application. Digital subscriptions can be purchased
individually or through group corporate or group education subscriptions. Our metered model offers users free
access to a set number of articles per month and then charges users for access to content beyond that limit.
In addition to subscriptions to our news product, we offer standalone subscriptions to other digital products,
namely our Crossword and Cooking products. Certain digital news product subscription packages include access to
our Crossword and Cooking products.
Our products also include news and opinion podcasts, which are distributed both on our digital platforms and
on third-party platforms. We generate advertising and licensing revenue from this content, but do not charge users for
access.
The Times’s print edition newspaper, published seven days a week in the United States, commenced
publication in 1851. The Times also has an international edition that is tailored for global audiences. First published in
2013 and previously called the International New York Times, the international edition succeeded the International
Herald Tribune, a leading daily newspaper that commenced publishing in Paris in 1887. Our print newspapers are
sold in the United States and around the world through individual home-delivery subscriptions, bulk subscriptions
(primarily by schools and hotels) and single-copy sales. All print home-delivery subscribers are entitled to receive free
access to some or all of our digital products.
SUBSCRIPTIONS AND AUDIENCE
Our content reaches a broad audience through our digital and print platforms. As of December 30, 2018, we had
approximately 4.3 million paid subscriptions across 217 countries and territories to our digital and print products.
Paid digital-only subscriptions totaled approximately 3,360,000 as of December 30, 2018, an increase of
approximately 27% compared with December 31, 2017. This amount includes standalone paid subscriptions to our
Crossword and Cooking products, which totaled approximately 647,000 as of December 30, 2018. International
digital-only news subscriptions represented approximately 16% of our digital-only news subscriptions as of
December 30, 2018.
The number of paid digital-only subscriptions also includes estimated group corporate and group education
subscriptions (which collectively represent approximately 6% of total paid digital subscriptions to our news
products). The number of paid group subscriptions is derived using the value of the relevant contract and a
discounted basic subscription rate. The actual number of users who have access to our products through group
subscriptions is substantially higher.
In the United States, The Times had the largest daily and Sunday print circulation of all seven-day newspapers
for the three-month period ended September 30, 2018, according to data collected by the Alliance for Audited Media
(“AAM”), an independent agency that audits circulation of most U.S. newspapers and magazines.
For the fiscal year ended December 30, 2018, The Times’s average print circulation (which includes paid and
qualified circulation of the newspaper in print) was approximately 487,000 for weekday (Monday to Friday) and
992,000 for Sunday. (Under AAM’s reporting guidance, qualified circulation represents copies available for individual
P. 2 – THE NEW YORK TIMES COMPANY
consumers that are either non-paid or paid by someone other than the individual, such as copies delivered to schools
and colleges and copies purchased by businesses for free distribution.)
Internationally, average circulation for the international edition of our newspaper (which includes paid
circulation of the newspaper in print and electronic replica editions) for the fiscal years ended December 30, 2018, and
December 31, 2017, was approximately 170,000 (estimated) and 173,000, respectively. These figures follow the
guidance of Office de Justification de la Diffusion, an agency based in Paris and a member of the International
Federation of Audit Bureaux of Circulations that audits the circulation of most newspapers and magazines in France.
The final 2018 figure will not be available until April 2019.
According to comScore Media Metrix, an online audience measurement service, in 2018, NYTimes.com had a
monthly average of approximately 94 million unique visitors in the United States on either desktop/laptop computers
or mobile devices. Globally, including the United States, NYTimes.com had a 2018 monthly average of approximately
134 million unique visitors on either desktop/laptop computers or mobile devices, according to internal data
estimates.
ADVERTISING
We have a comprehensive portfolio of advertising products and services. Our advertising revenue is divided
into two main categories:
Display Advertising
Display advertising revenue is principally generated from advertisers (such as financial institutions, movie
studios, department stores, American and international fashion and technology) promoting products, services or
brands on our digital and print platforms.
In print, column-inch ads are priced according to established rates, with premiums for color and positioning.
The Times had the largest market share in 2018 in print advertising revenue among a national newspaper set that
consists of USA Today, The Wall Street Journal and The Times, according to MediaRadar, an independent agency that
measures advertising sales volume and estimates advertising revenue.
On our digital platforms, display advertising comprises banners, video, rich media and other interactive ads.
Display advertising also includes branded content on The Times’s platforms. Branded content is longer form
marketing content that is distinct from The Times’s editorial content.
In 2018, print and digital display advertising represented approximately 84% of our advertising revenues.
Other Advertising
Other print advertising primarily includes classified advertising paid for on a per line basis; revenues from
preprinted advertising, also known as free standing inserts; and advertising revenues from our licensing division.
Other digital advertising primarily includes creative services fees associated with our branded content studio
and our digital marketing agencies, including HelloSociety and Fake Love; advertising revenue generated by our
podcasts; advertising revenue generated by our product review and recommendation website, Wirecutter; and
classified advertising, which includes line ads sold in the major categories of real estate, help wanted, automotive and
other on either a per-listing basis for bundled listing packages, or as an add on to a print classified ad.
In 2018, print and digital other advertising represented approximately 16% of our advertising revenues.
Seasonality
Our business is affected in part by seasonal patterns in advertising, with generally higher advertising volume in
the fourth quarter due to holiday advertising.
THE NEW YORK TIMES COMPANY – P. 3
COMPETITION
Our print and digital products compete for subscriptions and advertising with other media in their respective
markets. Competition for subscription revenue and readership is generally based upon platform, format, content,
quality, service, timeliness and price, while competition for advertising is generally based upon audience levels and
demographics, advertising rates, service, targeting capabilities, advertising results and breadth of advertising
offerings.
Our print newspaper competes for subscriptions and advertising primarily with national newspapers such as
The Wall Street Journal and The Washington Post; newspapers of general circulation in New York City and its
suburbs; other daily and weekly newspapers and television stations and networks in markets in which The Times is
circulated; and some national news and lifestyle magazines. The international edition of our newspaper competes
with international sources of English-language news, including the Financial Times, Time, Bloomberg Business Week
and The Economist.
As our industry continues to experience a shift from print to digital media, our products face competition for
audience, subscriptions and advertising from a wide variety of digital media (some of which are free to users),
including news and other information websites and mobile applications, news aggregators, sites that cover niche
content, social media platforms, and other forms of media. In addition, we compete for advertising on digital
advertising networks and exchanges and real-time bidding and other programmatic buying channels, and our
branded content studio and digital marketing agencies compete with other marketing agencies that provide similar
services, including those of other publishers.
Our news and other digital products most directly compete for audience, subscriptions and advertising with
other U.S. news and information websites, mobile applications and digital products, including The Washington Post,
The Wall Street Journal, CNN, Vox, Vice, Buzzfeed, NBC News, NPR, Fox News, Yahoo! News and HuffPost. We also
compete for audience and advertising with customized news feeds and news aggregators such as Facebook
Newsfeed, Apple News and Google News. Internationally, our websites and mobile applications compete with
international online sources of English-language news, including BBC News, CNN, The Guardian, the Financial
Times, The Wall Street Journal, The Economist and Reuters.
OTHER BUSINESSES
We derive revenue from other businesses, which primarily include:
• The Company’s licensing division, which transmits articles, graphics and photographs from The Times and
other publications to approximately 1,800 newspapers, magazines and websites in over 100 countries and
territories worldwide. It also comprises a number of other businesses that primarily include digital archive
distribution, which licenses electronic databases to resellers in the business, professional and library markets;
magazine licensing; news digests; book development and rights and permissions;
• Wirecutter, a product review and recommendation website acquired in October 2016 that serves as a guide to
technology gear, home products and other consumer goods. This website generates affiliate referral revenue
(revenue generated by offering direct links to merchants in exchange for a portion of the sale price), which we
record as other revenues;
• The Company’s commercial printing operations, which utilize excess printing capacity at our College Point
facility in order to print products for third parties; and
• The Company’s NYT Live business, a platform for our live journalism that convenes thought leaders from
business, academia and government at conferences and events to discuss topics ranging from education to
sustainability to the luxury business.
P. 4 – THE NEW YORK TIMES COMPANY
PRINT PRODUCTION AND DISTRIBUTION
The Times is currently printed at our production and distribution facility in College Point, N.Y., as well as under
contract at 26 remote print sites across the United States. We also utilize excess printing capacity at our College Point
facility for commercial printing for third parties. The Times is delivered to newsstands and retail outlets in the New
York metropolitan area through a combination of third-party wholesalers and our own drivers. In other markets in the
United States and Canada, The Times is delivered through agreements with other newspapers and third-party delivery
agents.
The international edition of The Times is printed under contract at 37 sites throughout the world and is sold in
over 134 countries and territories. It is distributed through agreements with other newspapers and third-party delivery
agents.
RAW MATERIALS
The primary raw materials we use are newsprint and coated paper, which we purchase from a number of North
American and European producers. A significant portion of our newsprint is purchased from Resolute FP US Inc., a
subsidiary of Resolute Forest Products Inc., a large global manufacturer of paper, market pulp and wood products
with which we shared ownership in Donahue Malbaie Inc. (“Malbaie”), a Canadian newsprint company, before we
sold our interest in the fourth quarter of 2017.
In 2018 and 2017, we used the following types and quantities of paper:
(In metric tons)
Newsprint(1)
Coated and Supercalendered Paper(2)
2018
94,400
14,600
2017
90,500
16,500
(1) 2018 newsprint usage includes paper used for commercial printing.
(2) The Times uses a mix of coated and supercalendered paper for The New York Times Magazine, and coated paper for T: The New York
Times Style Magazine.
EMPLOYEES AND LABOR RELATIONS
We had approximately 4,320 full-time equivalent employees as of December 30, 2018.
As of December 30, 2018, nearly half of our full-time equivalent employees were represented by unions. The
following is a list of collective bargaining agreements covering various categories of the Company’s employees and
their corresponding expiration dates. As indicated below, one collective bargaining agreement, under which less than
10% of our full-time equivalent employees are covered, will expire within one year and we expect negotiations for a
new contract to begin in the near future. We cannot predict the timing or the outcome of these negotiations.
Employee Category
Mailers
Typographers
NewsGuild of New York
Paperhandlers
Pressmen
Stereotypers
Machinists
Drivers
Expiration Date
March 30, 2019
March 30, 2020
March 30, 2021
March 30, 2021
March 30, 2021
March 30, 2021
March 30, 2022
March 30, 2025
THE NEW YORK TIMES COMPANY – P. 5
AVAILABLE INFORMATION
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all
amendments to those reports, and the Proxy Statement for our Annual Meeting of Stockholders are made available,
free of charge, on our website at http://www.nytco.com, as soon as reasonably practicable after such reports have
been filed with or furnished to the SEC.
P. 6 – THE NEW YORK TIMES COMPANY
ITEM 1A. RISK FACTORS
You should carefully consider the risk factors described below, as well as the other information included in this
Annual Report on Form 10-K. Our business, financial condition or results of operations could be materially adversely
affected by any or all of these risks, or by other risks or uncertainties not presently known or currently deemed
immaterial, that may adversely affect us in the future.
We face significant competition in all aspects of our business.
We operate in a highly competitive environment. We compete for subscription and advertising revenue with
both traditional and other content providers, as well as search engines and social media platforms. Competition
among companies offering online content is intense, and new competitors can quickly emerge.
Our ability to compete effectively depends on many factors both within and beyond our control, including
among others:
• our ability to continue delivering high-quality journalism and content that is interesting and relevant to our
audience;
•
the popularity, usefulness, ease of use, performance and reliability of our digital products compared with
those of our competitors;
•
the engagement of our current users with our products, and our ability to reach new users;
• our ability to develop, maintain and monetize our products;
•
the pricing of our products;
• our marketing and selling efforts, including our ability to differentiate our products from those of our
competitors;
•
the visibility of our content and products on search engines and social media platforms and in mobile app
stores, compared with that of our competitors;
• our ability to provide marketers with a compelling return on their investments;
• our ability to attract, retain, and motivate talented employees, including journalists and product and
technology specialists;
• our ability to manage and grow our business in a cost-effective manner; and
• our reputation and brand strength relative to those of our competitors.
Some of our current and potential competitors may have greater resources than we do, which may allow them
to compete more effectively than us.
Our success depends on our ability to respond and adapt to changes in technology and consumer behavior.
Technology in the media industry continues to evolve rapidly. Advances in technology have led to an increased
number of methods for the delivery and consumption of news and other content. These developments are also
driving changes in the preferences and expectations of consumers as they seek more control over how they consume
content.
Changes in technology and consumer behavior pose a number of challenges that could adversely affect our
revenues and competitive position. For example, among others:
• we may be unable to develop digital products that consumers find engaging, that work with a variety of
operating systems and networks and that achieve a high level of market acceptance;
• we may introduce new products or services, or make changes to existing products and services, that are not
favorably received by consumers;
•
there may be changes in user sentiment about the quality or usefulness of our existing products or concerns
related to privacy, security or other factors;
THE NEW YORK TIMES COMPANY – P. 7
•
•
failure to successfully manage changes implemented by social media platforms, search engines, news
aggregators or mobile app stores and device manufacturers, including those affecting how our content and
applications are prioritized, displayed and monetized, could affect our business;
consumers may increasingly use technology (such as incognito browsing) that decreases our ability to obtain
a complete view of the behavior of users who engage with our products;
• we may be unable to maintain or update our technology infrastructure in a way that meets market and
consumer demands; and
•
the consumption of our content on delivery platforms of third parties may lead to limitations on monetization
of our products, the loss of control over distribution of our content and of a direct relationship with our
audience, and lower engagement and subscription rates.
Responding to these changes may require significant investment. We may be limited in our ability to invest
funds and resources in digital products, services or opportunities, and we may incur expense in building, maintaining
and evolving our technology infrastructure.
Unless we are able to use new and existing technologies to distinguish our products and services from those of
our competitors and develop in a timely manner compelling new products and services that engage users across
platforms, our business, financial condition and prospects may be adversely affected.
A failure to continue to retain and grow our subscriber base could adversely affect our results of operations and
business.
Revenue from subscriptions to our print and digital products makes up a majority of our total revenue.
Subscription revenue is sensitive to discretionary spending available to subscribers in the markets we serve, as well as
economic conditions. To the extent poor economic conditions lead consumers to reduce spending on discretionary
activities, our ability to retain current and obtain new subscribers could be hindered, thereby reducing our
subscription revenue. In addition, the growth rate of new subscriptions to our news products that are driven by
significant news events, such as an election, and/or promotional pricing may not be sustainable.
Print subscriptions have continued to decline, primarily due to increased competition from digital media
formats (which are often free to users), higher subscription prices and a growing preference among many consumers
to receive all or a portion of their news from sources other than a print newspaper. If we are unable to offset continued
revenue declines resulting from falling print subscriptions with revenue from home-delivery price increases, our print
subscription revenue will be adversely affected. In addition, if we are unable to offset continued print subscription
revenue declines with digital subscription revenue, our subscription revenue will be adversely affected.
Subscriptions to content provided on our digital platforms generate substantial revenue for us, and our future
growth depends upon our ability to retain and grow our digital subscriber base and audience. To do so will require us
to evolve our subscription model, address changing consumer demands and developments in technology and
improve our digital product offering while continuing to deliver high-quality journalism and content that is
interesting and relevant to readers. We have invested, and will continue to invest, significant resources in these
efforts, but there is no assurance that we will be able to successfully maintain and increase our digital subscriber base
or that we will be able to do so without taking steps such as reducing pricing or incurring subscription acquisition
costs that would affect our margin or profitability.
Our ability to retain and grow our subscriber base also depends on the engagement of users with our products,
including the frequency, breadth and depth of their use. If users become less engaged with our products, they may be
less likely to purchase subscriptions or renew their existing subscriptions, which would adversely affect our
subscription revenues. In addition, we may implement changes in the free access we provide to our content or the
pricing of our subscriptions that could have an adverse impact on our ability to attract and retain subscribers.
Our advertising revenues are affected by numerous factors, including economic conditions, market dynamics,
audience fragmentation and evolving digital advertising trends.
We derive substantial revenues from the sale of advertising in our products. Advertising spending is sensitive
to overall economic conditions, and our advertising revenues could be adversely affected if advertisers respond to
weak and uneven economic conditions by reducing their budgets or shifting spending patterns or priorities, or if they
are forced to consolidate or cease operations.
P. 8 – THE NEW YORK TIMES COMPANY
In determining whether to buy advertising, our advertisers consider the demand for our products,
demographics of our reader base, advertising rates, results observed by advertisers, breadth of advertising offerings
and alternative advertising options.
Although print advertising revenue continues to represent a majority of our total advertising revenue
(approximately 54% of our total advertising revenues in 2018), the overall proportion continues to decline. The
increased popularity of digital media among consumers, particularly as a source for news and other content, has
driven a corresponding shift in demand from print advertising to digital advertising. However, our digital advertising
revenue has not replaced, and may not replace in full, print advertising revenue lost as a result of the shift.
The increasing number of digital media options available, including through social media platforms and news
aggregators, has expanded consumer choice significantly, resulting in audience fragmentation. Competition from
digital content providers and platforms, some of which charge lower rates than we do or have greater audience reach
and targeting capabilities, and the significant increase in inventory of digital advertising space, have affected and will
likely continue to affect our ability to attract and retain advertisers and to maintain or increase our advertising rates.
In recent years, large digital platforms, such as Facebook, Google and Amazon, which have greater audience reach
and targeting capabilities than we do, have commanded an increased share of the digital display advertising market,
and we anticipate that this trend will continue.
The digital advertising market itself continues to undergo significant change. Digital advertising networks and
exchanges, real-time bidding and other programmatic buying channels that allow advertisers to buy audiences at
scale are playing a more significant role in the advertising marketplace and may cause further downward pricing
pressure. Newer delivery platforms may also lead to a loss of distribution and pricing control and loss of a direct
relationship with consumers. Growing consumer reliance on mobile devices creates additional pressure, as mobile
display advertising may not command the same rates as desktop advertising. In addition, changes in the standards
for the delivery of digital advertising could also negatively affect our digital advertising revenues.
Technologies have been developed, and will likely continue to be developed, that enable consumers to
circumvent digital advertising on websites and mobile devices. Advertisements blocked by these technologies are
treated as not delivered and any revenue we would otherwise receive from the advertiser for that advertisement is
lost. Increased adoption of these technologies could adversely affect our advertising revenues, particularly if we are
unable to develop effective solutions to mitigate their impact.
We have continued to take steps intended to retain and grow our subscriber base, which we expect to have
long-term benefits for our advertising revenue, but may have the near-term effect of reducing inventory for digital
programmatic advertising in our products.
As the digital advertising market continues to evolve, our ability to compete successfully for advertising
budgets will depend on, among other things, our ability to engage and grow digital audiences and prove the value of
our advertising and the effectiveness of our platforms to advertisers.
We may experience further downward pressure on our advertising revenue margins.
The character of our advertising continues to change, as demand for newer forms of advertising, such as
branded content and other customized advertising increases. The margin on revenues from some of these advertising
forms is generally lower than the margin on revenues we generate from our print advertising and traditional digital
display advertising. Consequently, we may experience further downward pressure on our advertising revenue
margins as a greater percentage of advertising revenues comes from these newer forms.
Investments we make in new and existing products and services expose us to risks and challenges that could
adversely affect our operations and profitability.
We have invested and expect to continue to invest significant resources to enhance and expand our existing
products and services and to develop new products and services. These investments have included, among others:
enhancements to our core news product; our lifestyle products (including our existing Crossword and Cooking
products, as well as a new Parenting product we plan to launch); investments in our podcasts and upcoming
television program, The Weekly; as well as our commercial printing and other ancillary operations. These efforts
present numerous risks and challenges, including the potential need for us to develop additional expertise in certain
areas; technological and operational challenges; the need to effectively allocate capital resources; new and/or
increased costs (including marketing costs and costs to recruit, integrate and retain skilled employees); risks
THE NEW YORK TIMES COMPANY – P. 9
associated with new strategic relationships; new competitors (some of which may have more resources and
experience in certain areas); and additional legal and regulatory risks from expansion into new areas. As a result of
these and other risks and challenges, growth into new areas may divert internal resources and the attention of our
management and other personnel, including journalists and product and technology specialists.
Although we have an established reputation as a global media company, our ability to gain and maintain an
audience, particularly for some of our new digital products, is not certain, and if they are not favorably received, our
brand may be adversely affected. Even if our new products and services, or enhancements to existing products and
services, are favorably received, they may not advance our business strategy as expected, may result in unanticipated
costs or liabilities and may fall short of expected return on investment targets or fail to generate sufficient revenue to
justify our investments, which could adversely affect our business, results of operations and financial condition.
The fixed cost nature of significant portions of our expenses may limit our operating flexibility and could adversely
affect our results of operations.
We continually assess our operations in an effort to identify opportunities to enhance operational efficiencies
and reduce expenses. However, significant portions of our expenses are fixed costs that neither increase nor decrease
proportionately with revenues. In addition, our ability to make short-term adjustments to manage our costs or to
make changes to our business strategy may be limited by certain of our collective bargaining agreements. If we were
unable to implement cost-control efforts or reduce our fixed costs sufficiently in response to a decline in our revenues,
our results of operations will be adversely affected.
The size and volatility of our pension plan obligations may adversely affect our operations, financial condition and
liquidity.
We sponsor several single-employer defined benefit pension plans. Although we have frozen participation and
benefits under all but one of these qualified pension plans, and have taken other steps to reduce the size and volatility
of our pension plan obligations, our results of operations will be affected by the amount of income or expense we
record for, and the contributions we are required to make to, these plans.
We are required to make contributions to our plans to comply with minimum funding requirements imposed
by laws governing those plans. As of December 30, 2018, our qualified defined benefit pension plans were
underfunded by approximately $81 million. Our obligation to make additional contributions to our plans, and the
timing of any such contributions, depends on a number of factors, many of which are beyond our control. These
include: legislative changes; assumptions about mortality; and economic conditions, including a low interest rate
environment or sustained volatility and disruption in the stock and bond markets, which impact discount rates and
returns on plan assets.
As a result of required contributions to our qualified pension plans, we may have less cash available for
working capital and other corporate uses, which may have an adverse impact on our results of operations, financial
condition and liquidity.
In addition, the Company sponsors several non-qualified pension plans, with unfunded obligations totaling
$223 million. Although we have frozen participation and benefits under these plans, and have taken other steps to
reduce the size and volatility of our obligations under these plans, a number of factors, including changes in discount
rates or mortality tables, may have an adverse impact on our results of operations and financial condition.
Our participation in multiemployer pension plans may subject us to liabilities that could materially adversely affect
our results of operations, financial condition and cash flows.
We participate in, and make periodic contributions to, various multiemployer pension plans that cover many of
our current and former production and delivery union employees. Our required contributions to these plans could
increase because of a shrinking contribution base as a result of the insolvency or withdrawal of other companies that
currently contribute to these plans, the inability or failure of withdrawing companies to pay their withdrawal liability,
low interest rates, lower than expected returns on pension fund assets, other funding deficiencies, or potential
legislative action. Our withdrawal liability for any multiemployer pension plan will depend on the nature and timing
of any triggering event and the extent of that plan’s funding of vested benefits.
If a multiemployer pension plan in which we participate has significant underfunded liabilities, such
underfunding will increase the size of our potential withdrawal liability. In addition, under federal pension law,
special funding rules apply to multiemployer pension plans that are classified as “endangered,” “critical” or “critical
P. 10 – THE NEW YORK TIMES COMPANY
and declining.” If plans in which we participate are in critical status, benefit reductions may apply and/or we could
be required to make additional contributions.
We have recorded significant withdrawal liabilities with respect to multiemployer pension plans in which we
formerly participated (primarily in connection with the sales of the New England Media Group in 2013 and the
Regional Media Group in 2012) and may record additional liabilities in the future. In addition, due to declines in our
contributions, we have recorded withdrawal liabilities for actual and estimated partial withdrawals from several
plans in which we continue to participate. Until demand letters from some of the multiemployer plans’ trustees are
received, the exact amount of the withdrawal liability will not be fully known and, as such, a difference from the
recorded estimate could have an adverse effect on our results of operations, financial condition and cash flows.
Several of the multiemployer plans in which we participate are specific to the newspaper industry, which continues to
undergo significant pressure. A withdrawal by a significant percentage of participating employers may result in a
mass withdrawal declaration by the trustees of one or more of these plans, which would require us to record
additional withdrawal liabilities.
If, in the future, we elect to withdraw from these plans or if we trigger a partial withdrawal due to declines in
contribution base units or a partial cessation of our obligation to contribute, additional liabilities would need to be
recorded that could have an adverse effect on our business, results of operations, financial condition or cash flows.
Legislative changes could also affect our funding obligations or the amount of withdrawal liability we incur if a
withdrawal were to occur.
Security breaches and other network and information systems disruptions could affect our ability to conduct our
business effectively and damage our reputation.
Our systems store and process confidential subscriber, employee and other sensitive personal and Company
data, and therefore maintaining our network security is of critical importance. In addition, we rely on the technology
and systems provided by third-party vendors (including cloud-based service providers) for a variety of operations,
including encryption and authentication technology, employee email, domain name registration, content delivery to
customers, administrative functions (including payroll processing and certain finance and accounting functions) and
other operations.
We regularly face attempts by third parties to breach our security and compromise our information technology
systems. These attackers may use a blend of technology and social engineering techniques (including denial of service
attacks, phishing attempts intended to induce our employees and users to disclose information or unwittingly
provide access to systems or data and other techniques), with the goal of service disruption or data exfiltration.
Information security threats are constantly evolving, increasing the difficulty of detecting and successfully defending
against them. To date, no incidents have had, either individually or in the aggregate, a material adverse effect on our
business, financial condition or results of operations.
In addition, our systems, and those of third parties upon which our business relies, may be vulnerable to
interruption or damage that can result from natural disasters or the effects of climate change (such as increased storm
severity and flooding), fires, power outages or internet outages, acts of terrorism or other similar events.
We have implemented controls and taken other preventative measures designed to strengthen our systems
against such incidents and attacks, including measures designed to reduce the impact of a security breach at our
third-party vendors. Although the costs of the controls and other measures we have taken to date have not had a
material effect on our financial condition, results of operations or liquidity, there can be no assurance as to the costs of
additional controls and measures that we may conclude are necessary in the future.
There can also be no assurance that the actions, measures and controls we have implemented will be effective
against future attacks or be sufficient to prevent a future security breach or other disruption to our network or
information systems, or those of our third-party providers, and our disaster recovery planning cannot account for all
eventualities. Such an event could result in a disruption of our services, improper disclosure of personal data or
confidential information, or theft or misuse of our intellectual property, all of which could harm our reputation,
require us to expend resources to remedy such a security breach or defend against further attacks, divert
management’s attention and resources or subject us to liability under laws that protect personal data, or otherwise
adversely affect our business. While we maintain cyber risk insurance, the costs relating to any data breach could be
substantial, and our insurance may not be sufficient to cover all losses related to any future breaches of our systems.
THE NEW YORK TIMES COMPANY – P. 11
Our brand and reputation are key assets of the Company, and negative perceptions or publicity could adversely affect
our business, financial condition and results of operations.
We believe that The New York Times brand is a powerful and trusted brand with an excellent reputation for
high-quality independent journalism and content, but that our brand could be damaged by incidents that erode
consumer trust. For example, to the extent consumers perceive our journalism to be less reliable, whether as a result of
negative publicity or otherwise, our ability to attract readers and advertisers may be hindered. In addition, we may
introduce new products or services that users do not like and that may negatively affect our brand. We also may fail
to provide adequate customer service, which could erode confidence in our brand. Our reputation could also be
damaged by failures of third-party vendors we rely on in many contexts. We are investing in defining and enhancing
our brand. These investments are considerable and may not be successful. To the extent our brand and reputation are
damaged by these or other incidents, our revenues and profitability could be adversely affected.
Our international operations expose us to economic and other risks inherent in foreign operations.
We have news bureaus and other offices around the world, and our digital and print products are generally
available globally. We are focused on further expanding the international scope of our business, and face the inherent
risks associated with doing business abroad, including:
• effectively managing and staffing foreign operations, including complying with local laws and regulations in
each different jurisdiction;
• ensuring the safety and security of our journalists and other employees;
• navigating local customs and practices;
• government policies and regulations that restrict the digital flow of information, which could block access to,
or the functionality of, our products, or other retaliatory actions or behavior by government officials;
• protecting and enforcing our intellectual property and other rights under varying legal regimes;
•
complying with international laws and regulations, including those governing intellectual property, libel and
defamation, consumer privacy and the collection, use, retention, sharing and security of consumer and staff
data;
• potential economic, legal, political or social uncertainty and volatility in local or global market conditions
(e.g., as a result of the implementation of the United Kingdom’s referendum to withdraw membership from
the European Union, commonly referred to as Brexit);
•
restrictions on the ability of U.S. companies to do business in foreign countries, including restrictions on
foreign ownership, foreign investment or repatriation of funds;
• higher-than-anticipated costs of entry; and
•
currency exchange rate fluctuations.
Adverse developments in any of these areas could have an adverse impact on our business, financial condition
and results of operations. For example, we may incur increased costs necessary to comply with existing and newly
adopted laws and regulations or penalties for any failure to comply.
In addition, we have limited experience in developing and marketing our digital products in certain
international regions and non-English languages and could be at a disadvantage compared with local and
multinational competitors.
Failure to comply with laws and regulations, including with respect to privacy, data protection and consumer
marketing practices, could adversely affect our business.
Our business is subject to various laws and regulations of local and foreign jurisdictions, including laws and
regulations with respect to online privacy and the collection and use of personal data, as well as laws and regulations
with respect to consumer marketing practices.
Various federal and state laws and regulations, as well as the laws of foreign jurisdictions, govern the collection,
use, retention, processing, sharing and security of the data we receive from and about our users. Failure to protect
confidential user data, provide users with adequate notice of our privacy policies or obtain required valid consent, for
P. 12 – THE NEW YORK TIMES COMPANY
example, could subject us to liabilities imposed by these jurisdictions. Existing privacy-related laws and regulations
are evolving and subject to potentially differing interpretations, and various federal and state legislative and
regulatory bodies, as well as foreign legislative and regulatory bodies, may expand current or enact new laws
regarding privacy and data protection. For example, the General Data Protection Regulation adopted by the European
Union imposed more stringent data protection requirements and significant penalties for noncompliance as of May
25, 2018; California’s recently adopted Consumer Privacy Act creates new data privacy rights effective in 2020; and
the European Union’s forthcoming ePrivacy Regulation is expected to impose, with respect to electronic
communications, stricter data protection and data processing requirements.
In addition, various federal and state laws and regulations, as well as the laws of foreign jurisdictions, govern
the manner in which we market our subscription products, including with respect to pricing and subscription
renewals. These laws and regulations often differ across jurisdictions.
Existing and newly adopted laws and regulations (or new interpretations of existing laws and regulations) may
impose new obligations in areas affecting our business, require us to incur increased compliance costs and cause us to
further adjust our advertising or marketing practices. Any failure, or perceived failure, by us or the third parties upon
which we rely to comply with laws and regulations that govern our business operations, as well as any failure, or
perceived failure, by us or the third parties upon which we rely to comply with our own posted policies, could result
in claims against us by governmental entities or others, negative publicity and a loss of confidence in us by our users
and advertisers. Each of these potential consequences could adversely affect our business and results of operations.
A significant increase in the price of newsprint, or significant disruptions in our newsprint supply chain or
newspaper printing and distribution channels, would have an adverse effect on our operating results.
The cost of raw materials, of which newsprint is the major component, represented approximately 5% of our
total operating costs in 2018. The price of newsprint has historically been volatile and could increase as a result of
various factors, including:
•
•
•
•
•
a reduction in the number of newsprint suppliers due to restructurings, bankruptcies, consolidations and
conversions to other grades of paper;
increases in supplier operating expenses due to rising raw material or energy costs or other factors;
currency volatility;
duties on certain paper imports from Canada into United States; and
an inability to maintain existing relationships with our newsprint suppliers.
We also rely on suppliers for deliveries of newsprint, and the availability of our newsprint supply may be
affected by various factors, including labor unrest, transportation issues and other disruptions that may affect
deliveries of newsprint.
Outside the New York area, The Times is printed and distributed under contracts with print and distribution
partners across the United States and internationally. Financial pressures, newspaper industry economics or other
circumstances affecting these print and distribution partners could lead to reduced operations or consolidations of
print sites and/or distribution routes, which could increase the cost of printing and distributing our newspapers.
If newsprint prices increase significantly or we experience significant disruptions in our newsprint supply chain
or newspaper printing and distribution channels, our operating results may be adversely affected.
Acquisitions, divestitures, investments and other transactions could adversely affect our costs, revenues,
profitability and financial position.
In order to position our business to take advantage of growth opportunities, we engage in discussions, evaluate
opportunities and enter into agreements for possible acquisitions, divestitures, investments and other transactions.
We may also consider the acquisition of, or investment in, specific properties, businesses or technologies that fall
outside our traditional lines of business and diversify our portfolio, including those that may operate in new and
developing industries, if we deem such properties sufficiently attractive.
THE NEW YORK TIMES COMPANY – P. 13
Acquisitions may involve significant risks and uncertainties, including:
• difficulties in integrating acquired businesses (including cultural challenges associated with integrating
employees from the acquired company into our organization);
• diversion of management attention from other business concerns or resources;
• use of resources that are needed in other parts of our business;
• possible dilution of our brand or harm to our reputation;
•
•
the potential loss of key employees;
risks associated with integrating financial reporting, internal control and information technology systems;
and
• other unanticipated problems and liabilities.
Competition for certain types of acquisitions, particularly digital properties, is significant. Even if successfully
negotiated, closed and integrated, certain acquisitions or investments may prove not to advance our business strategy,
may cause us to incur unanticipated costs or liabilities and may fall short of expected return on investment targets,
which could adversely affect our business, results of operations and financial condition.
In addition, we have divested and may in the future divest certain assets or businesses that no longer fit with
our strategic direction or growth targets. Divestitures involve significant risks and uncertainties that could adversely
affect our business, results of operations and financial condition. These include, among others, the inability to find
potential buyers on favorable terms, disruption to our business and/or diversion of management attention from other
business concerns, loss of key employees and possible retention of certain liabilities related to the divested business.
Finally, we have made investments in companies, and we may make similar investments in the future.
Investments in these businesses subject us to the operating and financial risks of these businesses and to the risk that
we do not have sole control over the operations of these businesses. Our investments are generally illiquid and the
absence of a market may inhibit our ability to dispose of them. In addition, if the book value of an investment were to
exceed its fair value, we would be required to recognize an impairment charge related to the investment.
A significant number of our employees are unionized, and our business and results of operations could be adversely
affected if labor agreements were to further restrict our ability to maximize the efficiency of our operations.
Nearly half of our full-time equivalent work force is unionized. As a result, we are required to negotiate the
wage, benefits and other terms and conditions of employment with many of our employees collectively. Our results
could be adversely affected if future labor negotiations or contracts were to further restrict our ability to maximize the
efficiency of our operations, or if a larger percentage of our workforce were to be unionized. If we are unable to
negotiate labor contracts on reasonable terms, or if we were to experience labor unrest or other business interruptions
in connection with labor negotiations or otherwise, our ability to produce and deliver our products could be
impaired. In addition, our ability to make adjustments to control compensation and benefits costs, change our
strategy or otherwise adapt to changing business needs may be limited by the terms and duration of our collective
bargaining agreements.
We are subject to payment processing risk.
We accept payments using a variety of different payment methods, including credit and debit cards and direct
debit. We rely on internal systems as well as those of third parties to process payments. Acceptance and processing of
these payment methods are subject to certain certifications, rules and regulations. To the extent there are disruptions
in our or third-party payment processing systems, material changes in the payment ecosystem, failure to recertify
and/or changes to rules or regulations concerning payment processing, we could be subject to fines and/or civil
liability, or lose our ability to accept credit and debit card payments, which would harm our reputation and adversely
impact our results of operations.
Our business may suffer if we cannot protect our intellectual property.
Our business depends on our intellectual property, including our valuable brands, content, services and
internally developed technology. We believe our proprietary trademarks and other intellectual property rights are
important to our continued success and our competitive position. Unauthorized parties may attempt to copy or
otherwise unlawfully obtain and use our content, services, technology and other intellectual property, and we cannot
P. 14 – THE NEW YORK TIMES COMPANY
be certain that the steps we have taken to protect our proprietary rights will prevent any misappropriation or
confusion among consumers and merchants, or unauthorized use of these rights.
Advancements in technology have made the unauthorized duplication and wide dissemination of content
easier, making the enforcement of intellectual property rights more challenging. In addition, as our business and the
risk of misappropriation of our intellectual property rights have become more global in scope, we may not be able to
protect our proprietary rights in a cost-effective manner in a multitude of jurisdictions with varying laws.
If we are unable to procure, protect and enforce our intellectual property rights, including maintaining and
monetizing our intellectual property rights to our content, we may not realize the full value of these assets, and our
business and profitability may suffer. In addition, if we must litigate in the United States or elsewhere to enforce our
intellectual property rights or determine the validity and scope of the proprietary rights of others, such litigation may
be costly.
We have been, and may be in the future, subject to claims of intellectual property infringement that could adversely
affect our business.
We periodically receive claims from third parties alleging infringement, misappropriation or other violations of
their intellectual property rights. These third parties include rights holders seeking to monetize intellectual property
they own or otherwise have rights to through asserting claims of infringement or misuse. Even if we believe that these
claims of intellectual property infringement are without merit, defending against the claims can be time-consuming,
be expensive to litigate or settle, and cause diversion of management attention.
These intellectual property infringement claims, if successful, may require us to enter into royalty or licensing
agreements on unfavorable terms, use more costly alternative technology or otherwise incur substantial monetary
liability. Additionally, these claims may require us to significantly alter certain of our operations. The occurrence of
any of these events as a result of these claims could result in substantially increased costs or otherwise adversely
affect our business.
We may not have access to the capital markets on terms that are acceptable to us or may otherwise be limited in our
financing options.
From time to time the Company may need or desire to access the long-term and short-term capital markets to
obtain financing. The Company’s access to, and the availability of, financing on acceptable terms and conditions in
the future will be impacted by many factors, including, but not limited to: (1) the Company’s financial performance;
(2) the Company’s credit ratings or absence of a credit rating; (3) liquidity of the overall capital markets and (4) the
state of the economy. There can be no assurance that the Company will continue to have access to the capital markets
on terms acceptable to it.
In addition, macroeconomic conditions, such as volatility or disruption in the credit markets, could adversely
affect our ability to obtain financing to support operations or to fund acquisitions or other capital-intensive initiatives.
Our Class B Common Stock is principally held by descendants of Adolph S. Ochs, through a family trust, and this
control could create conflicts of interest or inhibit potential changes of control.
We have two classes of stock: Class A Common Stock and Class B Common Stock. Holders of Class A Common
Stock are entitled to elect 30% of the Board of Directors and to vote, with holders of Class B Common Stock, on the
reservation of shares for equity grants, certain material acquisitions and the ratification of the selection of our
auditors. Holders of Class B Common Stock are entitled to elect the remainder of the Board of Directors and to vote
on all other matters. Our Class B Common Stock is principally held by descendants of Adolph S. Ochs, who
purchased The Times in 1896. A family trust holds approximately 90% of the Class B Common Stock. As a result, the
trust has the ability to elect 70% of the Board of Directors and to direct the outcome of any matter that does not
require a vote of the Class A Common Stock. Under the terms of the trust agreement, the trustees are directed to retain
the Class B Common Stock held in trust and to vote such stock against any merger, sale of assets or other transaction
pursuant to which control of The Times passes from the trustees, unless they determine that the primary objective of
the trust can be achieved better by the implementation of such transaction. Because this concentrated control could
discourage others from initiating any potential merger, takeover or other change of control transaction that may
otherwise be beneficial to our businesses, the market price of our Class A Common Stock could be adversely affected.
THE NEW YORK TIMES COMPANY – P. 15
Adverse results from litigation or governmental investigations can impact our business practices and operating
results.
From time to time, we are party to litigation, including matters relating to alleged libel or defamation and
employment-related matters, as well as regulatory, environmental and other proceedings with governmental
authorities and administrative agencies. See Note 19 of the Notes to the Consolidated Financial Statements regarding
certain matters. Adverse outcomes in lawsuits or investigations could result in significant monetary damages or
injunctive relief that could adversely affect our results of operations or financial condition as well as our ability to
conduct our business as it is presently being conducted. In addition, regardless of merit or outcome, such proceedings
can have an adverse impact on the Company as a result of legal costs, diversion of management and other personnel,
and other factors.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
Our principal executive offices are located in our New York headquarters building in the Times Square area.
The building was completed in 2007 and consists of approximately 1.54 million gross square feet, of which
approximately 828,000 gross square feet of space have been allocated to us. We owned a leasehold condominium
interest representing approximately 58% of the New York headquarters building until March 2009, when we entered
into an agreement to sell and simultaneously lease back 21 floors, or approximately 750,000 rentable square feet,
occupied by us (the “Condo Interest”). The sale price for the Condo Interest was $225.0 million. The lease term is 15
years, and we have three renewal options that could extend the term for an additional 20 years. We have an option to
repurchase the Condo Interest for $250.0 million in the fourth quarter of 2019, and we have provided notice of our
intent to exercise this option. We continue to own a leasehold condominium interest in seven floors in our New York
headquarters building, totaling approximately 216,000 rentable square feet that were not included in the sale-
leaseback transaction, all of which are currently leased to third parties.
As part of the Company’s redesign of our headquarters building, which was substantially completed in the
fourth quarter of 2018, we consolidated the Company’s operations from the 17 floors we previously occupied and we
have leased five and a half additional floors to third parties as of December 30, 2018.
In addition, we have a printing and distribution facility with 570,000 gross square feet located in College Point,
N.Y., on a 31-acre site owned by the City of New York for which we have a ground lease. We have an option to
purchase the property before the lease ends in 2019 for $6.9 million. As of December 30, 2018, we also owned other
properties with an aggregate of approximately 3,000 gross square feet and leased other properties with an aggregate
of approximately 187,000 rentable square feet in various locations.
ITEM 3. LEGAL PROCEEDINGS
We are involved in various legal actions incidental to our business that are now pending against us. These
actions are generally for amounts greatly in excess of the payments, if any, that may be required to be made. See Note
19 of the Notes to the Consolidated Financial Statements for a description of certain matters, which is incorporated
herein by reference. Although the Company cannot predict the outcome of these matters, it is possible that an
unfavorable outcome in one or more matters could be material to the Company’s consolidated results of operations or
cash flows for an individual reporting period. However, based on currently available information, management does
not believe that the ultimate resolution of these matters, individually or in the aggregate, is likely to have a material
effect on the Company’s financial position.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
P. 16 – THE NEW YORK TIMES COMPANY
EXECUTIVE OFFICERS OF THE REGISTRANT
Name
Mark Thompson
A.G. Sulzberger
R. Anthony Benten
Diane Brayton
Roland A. Caputo
Age
61
Employed By
Registrant Since
2012
38
55
50
58
2009
1989
2004
1986
Meredith Kopit Levien
47
2013
Recent Position(s) Held as of February 26, 2019
President and Chief Executive Officer (since 2012); Director-
General, British Broadcasting Corporation (2004 to 2012)
Publisher of The Times (since 2018); Deputy Publisher (2016 to
2017); Associate Editor (2015-2016); Assistant Editor
(2012-2015)
Senior Vice President, Treasurer (since December 2016) and
Corporate Controller (since 2007); Senior Vice President,
Finance (2008 to 2016)
Executive Vice President, General Counsel (since January 2017)
and Secretary (since 2011); Deputy General Counsel (2016);
Assistant Secretary (2009 to 2011) and Assistant General
Counsel (2009 to 2016)
Executive Vice President and Chief Financial Officer (since
2018); Executive Vice President, Print Products and Services
Group (2013 to 2018); Senior Vice President and Chief Financial
Officer, The New York Times Media Group (2008 to 2013)
Executive Vice President (since 2013) and Chief Operating
Officer (since 2017); Chief Revenue Officer (2015 to 2017);
Executive Vice President, Advertising (2013 to 2015); Chief
Revenue Officer, Forbes Media LLC (2011 to 2013)
THE NEW YORK TIMES COMPANY – P. 17
PART II
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
MARKET INFORMATION
The Class A Common Stock is listed on the New York Stock Exchange under the trading symbol “NYT”. The
Class B Common Stock is unlisted and is not actively traded.
The number of security holders of record as of February 21, 2019, was as follows: Class A Common Stock: 5,394;
Class B Common Stock: 25.
We have paid quarterly dividends of $0.04 per share on the Class A and Class B Common Stock since late 2013.
In February 2019, the Board of Directors approved a quarterly dividend of $0.05 per share. We currently expect to
continue to pay comparable cash dividends in the future, although changes in our dividend program may be
considered by our Board of Directors in light of our earnings, capital requirements, financial condition and other
factors considered relevant. In addition, our Board of Directors will consider restrictions in any future indebtedness.
ISSUER PURCHASES OF EQUITY SECURITIES(1)
Total number of
shares of Class A
Common Stock
purchased
(a)
Average
price paid
per share of
Class A
Common Stock
(b)
Total number of
shares of Class A
Common Stock
purchased
as part of
publicly
announced plans
or programs
(c)
Maximum
number (or
approximate
dollar value)
of shares of
Class A
Common
Stock that may
yet be
purchased
under the plans
or programs
(d)
— $
— $
— $
— $
—
—
—
—
— $
— $
— $
— $
16,236,612
16,236,612
16,236,612
16,236,612
Period
October 1, 2018 - November 4, 2018
November 5, 2018 - December 2, 2018
December 3, 2018 - December 30, 2018
Total for the fourth quarter of 2018
(1) On January 13, 2015, the Board of Directors approved an authorization of $101.1 million to repurchase shares of the Company’s Class A
Common Stock. As of December 30, 2018, repurchases under this authorization totaled $84.9 million (excluding commissions), and $16.2 million
remained under this authorization. All purchases were made pursuant to our publicly announced share repurchase program. Our Board of
Directors has authorized us to purchase shares from time to time, subject to market conditions and other factors. There is no expiration date with
respect to this authorization.
P. 18 – THE NEW YORK TIMES COMPANY
PERFORMANCE PRESENTATION
The following graph shows the annual cumulative total stockholder return for the five fiscal years ended
December 30, 2018, on an assumed investment of $100 on December 29, 2013, in the Company, the Standard & Poor’s
S&P 400 MidCap Stock Index and the Standard & Poor’s S&P 1500 Publishing and Printing Index. Stockholder return
is measured by dividing (a) the sum of (i) the cumulative amount of dividends declared for the measurement period,
assuming reinvestment of dividends, and (ii) the difference between the issuer’s share price at the end and the
beginning of the measurement period, by (b) the share price at the beginning of the measurement period. As a result,
stockholder return includes both dividends and stock appreciation.
Stock Performance Comparison Between the S&P 400 Midcap Index, S&P 1500 Publishing & Printing Index
and The New York Times Company’s Class A Common Stock
THE NEW YORK TIMES COMPANY – P. 19
ITEM 6. SELECTED FINANCIAL DATA
The Selected Financial Data should be read in conjunction with “Item 7 — Management’s Discussion and
Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements and the
related Notes in Item 8. The results of operations for the New England Media Group, which was sold in 2013, have
been presented as discontinued operations for all periods presented (see Note 14 of the Notes to the Consolidated
Financial Statements). The pages following the table show certain items included in Selected Financial Data. All per
share amounts on those pages are on a diluted basis. Fiscal year 2017 comprised 53 weeks and all other fiscal years
presented in the table below comprised 52 weeks.
(In thousands)
Statement of Operations Data
Revenues
Operating costs (1)
As of and for the Years Ended
December 30,
2018
December 31,
2017
December 25,
2016
December 27,
2015
December 28,
2014
(52 Weeks)
(53 Weeks)
(52 Weeks)
(52 Weeks)
(52 Weeks)
$
1,748,598
$
1,675,639
$
1,555,342
$
1,579,215
$
1,588,528
1,558,778
1,493,278
1,419,416
1,385,840
1,470,234
Headquarters redesign and consolidation
Restructuring charge
Multiemployer pension and other contractual (gain)/
loss (1)
4,504
—
10,090
—
(4,851)
(4,320)
Early termination charge and other expenses
—
—
—
16,518
6,730
—
—
—
9,055
—
—
—
—
2,550
Operating profit (1)
190,167
176,591
112,678
184,320
115,744
Other components of net periodic benefit costs (1)
Gain/(loss) from joint ventures
Interest expense and other, net
Income from continuing operations before income
taxes
Income from continuing operations
Loss from discontinued operations, net of income
taxes
Net income attributable to The New York Times
Company common stockholders
Balance Sheet Data
8,274
10,764
16,566
176,091
127,460
64,225
18,641
19,783
111,224
7,268
11,074
47,735
(36,273)
(783)
34,805
39,050
30,526
26,105
96,752
62,842
23,796
(8,368)
53,730
29,850
33,391
—
(431)
(2,273)
—
(1,086)
125,684
4,296
29,068
63,246
33,307
Cash, cash equivalents and marketable securities
$
826,363
$
732,911
$
737,526
$
904,551
$
981,170
Property, plant and equipment, net
638,846
640,939
596,743
632,439
665,758
Total assets
2,197,123
2,099,780
2,185,395
2,417,690
2,566,474
Total debt and capital lease obligations
253,630
Total New York Times Company stockholders’ equity
1,040,781
250,209
897,279
246,978
847,815
431,228
826,751
650,120
726,328
(1) As a result of the adoption of the ASU 2017-07 during the first quarter of 2018, the service cost component of net periodic benefit costs/(income)
from our pension and other postretirement benefits plans will continue to be presented within operating costs, while the other components of
net periodic benefits costs/(income) such as interest cost, amortization of prior service credit and gains or losses from our pension and other
postretirement benefits plans will be separately presented outside of “Operating costs” in the new line item “Other components of net periodic
benefits costs/(income)”. The Company has recast the Consolidated Statement of Operations for the respective prior periods presented to
conform with the current period presentation. Costs associated with multiemployer pension plans were not addressed in ASU 2017-07, and
continue to be included in operating costs, except as separately disclosed.
P. 20 – THE NEW YORK TIMES COMPANY
(In thousands, except ratios, per share
and employee data)
December 30,
2018
December 31,
2017
December 25,
2016
December 27,
2015
December 28,
2014
(52 Weeks)
(53 Weeks)
(52 Weeks)
(52 Weeks)
(52 Weeks)
As of and for the Years Ended
Per Share of Common Stock
Basic earnings/(loss) per share attributable to The New York Times Company common stockholders:
0.76
$
0.03
$
0.19
$
0.38
$
0.23
Income from continuing operations
Loss from discontinued operations, net of income
taxes
Net income
$
$
—
—
(0.01)
0.76
$
0.03
$
0.18
Diluted earnings/(loss) per share attributable to The New York Times Company common stockholders:
Income from continuing operations
Loss from discontinued operations, net of income
taxes
Net income
Dividends declared per share
New York Times Company stockholders’ equity per
share
$
$
$
$
0.75
$
0.03
$
0.19
—
0.75
0.16
6.23
$
$
$
—
0.03
0.16
5.46
$
$
$
(0.01)
0.18
0.16
5.21
—
0.38
0.38
—
0.38
0.16
4.97
$
$
$
$
$
(0.01)
0.22
0.21
(0.01)
0.20
0.16
4.50
$
$
$
$
$
Average basic shares outstanding
Average diluted shares outstanding
Key Ratios
Operating profit to revenues
Return on average common stockholders’ equity
Return on average total assets
Total debt and capital lease obligations to total
capitalization
Current assets to current liabilities
Full-Time Equivalent Employees
164,845
166,939
161,926
164,263
161,128
162,817
164,390
166,423
150,673
161,323
10.9%
13.0%
5.8%
19.6%
1.33
4,320
10.5%
0.5%
0.2%
21.8%
1.80
3,789
7.2%
3.5%
1.3%
22.6%
2.00
3,710
11.7%
8.1%
2.5%
34.3%
1.53
3,560
7.3%
4.2%
1.3%
47.2%
1.91
3,588
The items below are included in the Selected Financial Data. As a result of the adoption of ASU 2017-07 during
the first quarter of 2018, the Company has recast the respective prior periods to conform with the current period
presentation.
2018
The items below had a net unfavorable effect on our Income from continuing operations of $7.3 million, or $.05
per share:
• $15.3 million of pre-tax expenses ($11.2 million after tax, or $.07 per share) for non-operating retirement costs;
• an $11.3 million pre-tax gain ($8.5 million after tax or $.05 per share) reflecting our proportionate share of a
distribution from the sale of assets by Madison Paper Industries (“Madison”), a partnership that previously
operated a paper mill, in which the Company has an investment through a subsidiary. See Note 6 of the Notes
to the Consolidated Financial Statements for more information on this item;
• a $6.7 million pre-tax charge ($4.9 million after tax, or $.03 per share) for severance costs;
• a $4.9 million pre-tax gain ($3.6 million after tax or $.02 per share) from a multiemployer pension plan
liability adjustment. See Note 10 of the Notes to the Consolidated Financial Statements for more information
on this item; and
THE NEW YORK TIMES COMPANY – P. 21
• a $4.5 million pre-tax charge ($3.3 million after tax or $.02 per share) in connection with the redesign and
consolidation of space in our headquarters building. See Note 8 of the Notes to the Consolidated Financial
Statements for more information on this item.
2017 (53-week fiscal year)
The items below had a net unfavorable effect on our Income from continuing operations of $119.9 million, or $.
73 per share:
• $102.1 million of pre-tax pension settlement charges ($61.5 million after tax, or $.37 per share) in connection
with the transfer of certain pension benefit obligations to insurers (in connection with the adoption of ASU
2017-07 this amount was reclassified to “Other components of net periodic benefit costs” below “Operating
profit”);
• a $68.7 million charge ($.42 per share) primarily attributable to the remeasurement of our net deferred tax
assets required as a result of tax legislation;
• a $37.1 million pre-tax gain ($22.3 million after tax, or $.14 per share) primarily in connection with the
settlement of contractual funding obligations for a postretirement plan (in connection with the adoption of
ASU 2017-07, $32.7 million relating to the postretirement plan was reclassified to “Other components of net
periodic benefit costs” below “Operating profit” while the contractual gain of $4.3 million remains in
“Multiemployer pension and other contractual gains” within “Operating profit”);
• a $23.9 million pre-tax charge ($14.4 million after tax, or $.09 per share) for severance costs;
• a $15.3 million net pre-tax gain ($9.4 million after tax, or $.06 per share) from joint ventures consisting of (i) a
$30.1 million gain related to the sale of the remaining assets of Madison, (ii) an $8.4 million loss reflecting our
proportionate share of Madison’s settlement of pension obligations, and (iii) a $6.4 million loss from the sale
of our 49% equity interest in Donahue Malbaie Inc. (“Malbaie”), a Canadian newsprint company;
• a $10.1 million pre-tax charge ($6.1 million after tax, or $.04 per share) in connection with the redesign and
consolidation of space in our headquarters building; and
• $1.5 million of pre-tax expenses ($0.9 million after tax, or $.01 per share) for non-operating retirement costs;
2016
The items below had a net unfavorable effect on our Income from continuing operations of $60.2 million, or $.37
per share:
• a $37.5 million pre-tax loss ($22.8 million after tax, or $.14 per share) from joint ventures related to the
announced closure of the paper mill operated by Madison;
• a $21.3 million pre-tax pension settlement charge ($12.8 million after tax, or $.08 per share) in connection with
lump-sum payments made under an immediate pension benefits offer to certain former employees (in
connection with the adoption of ASU 2017-07 this amount was reclassified to “Other components of net
periodic benefit costs” below “Operating profit”);
• an $18.8 million pre-tax charge ($11.3 million after tax, or $.07 per share) for severance costs;
• a $16.5 million pre-tax charge ($9.8 million after tax, or $.06 per share) in connection with the streamlining of
the Company’s international print operations (primarily consisting of severance costs), (in connection with
the adoption of ASU 2017-07, $1.7 million related to a gain from the pension curtailment previously included
with this special item was reclassified to “Other components of net periodic benefit costs” below “Operating
profit”);
• a $6.7 million pre-tax charge ($4.0 million after tax or $.02 per share) for a partial withdrawal obligation under
a multiemployer pension plan following an unfavorable arbitration decision;
• a $5.5 million of pre-tax expenses ($3.3 million after tax, or $.02 per share) for non-operating retirement costs;
and
• a $3.8 million income tax benefit ($.02 per share) primarily due to a reduction in the Company’s reserve for
uncertain tax positions.
P. 22 – THE NEW YORK TIMES COMPANY
2015
The items below had a net unfavorable effect on our Income from continuing operations of $47.3 million, or $.28
per share:
• a $40.3 million pre-tax pension settlement charge ($24.0 million after tax, or $.14 per share) in connection with
lump-sum payments made under an immediate pension benefits offer to certain former employees;
• $22.9 million of pre-tax expenses ($13.7 million after tax, or $.08 per share) for non-operating retirement costs;
• a $9.1 million pre-tax charge ($5.4 million after tax, or $.03 per share) for partial withdrawal obligations under
multiemployer pension plans; and
• a $7.0 million pre-tax charge ($4.2 million after tax, or $.03 per share) for severance costs.
2014
The items below had a net unfavorable effect on our Income from continuing operations of $29.7 million, or $.19
per share:
• $27.5 million of pre-tax expenses ($16.3 million after tax, or $.10 per share) for non-operating retirement costs;
• a $36.1 million pre-tax charge ($21.4 million after tax, or $.13 per share) for severance costs;
• a $21.1 million income tax benefit ($.13 per share) primarily due to reductions in the Company’s reserve for
uncertain tax positions;
• a $9.5 million pre-tax pension settlement charge ($5.7 million after tax, or $.04 per share) in connection with
lump-sum payments made under an immediate pension benefits offer to certain former employees;
• a $9.2 million pre-tax charge ($5.9 million after tax or $.04 per share) for an impairment related to the
Company’s investment in a joint venture; and
• a $2.6 million pre-tax charge ($1.5 million after tax, or $.01 per share) for the early termination of a
distribution agreement.
The following table reconciles other components of net periodic benefit costs, to the comparable non-GAAP
metric, non-operating retirement costs:
(In thousands)
Other components of net periodic benefit costs:
Add: Multiemployer pension plan withdrawal costs
Less: Special Items
Pension settlement expense
Postretirement benefit plan settlement gain
Pension curtailment gain
Non-operating retirement costs
Years Ended
December 30,
2018
December 31,
2017
December 25,
2016
December 27,
2015
December 28,
2014
(52 Weeks)
(53 Weeks)
(52 Weeks)
(52 Weeks)
(52 Weeks)
8,274
7,002
—
—
—
15,276
64,225
6,599
102,109
(32,737)
—
1,452
11,074
14,001
47,735
15,537
23,796
13,282
21,294
40,329
9,525
—
(1,683)
5,464
—
—
—
—
22,943
27,553
THE NEW YORK TIMES COMPANY – P. 23
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis provides information that management believes is relevant to an
assessment and understanding of our consolidated financial condition as of December 30, 2018, and results of
operations for the three years ended December 30, 2018. This item should be read in conjunction with our
Consolidated Financial Statements and the related Notes included in this Annual Report.
EXECUTIVE OVERVIEW
We are a global media organization that includes newspapers, print and digital products and related businesses.
We have one reportable segment with businesses that include our newspaper, websites and mobile applications.
We generate revenues principally from subscriptions and advertising. Other revenues primarily consist of
revenues from licensing, affiliate referrals, building rental revenue, commercial printing, NYT Live (our live events
business) and retail commerce. Our main operating costs are employee-related costs.
In the accompanying analysis of financial information, we present certain information derived from
consolidated financial information but not presented in our financial statements prepared in accordance with
generally accepted accounting principles in the United States of America (“GAAP”). We are presenting in this report
supplemental non-GAAP financial performance measures that exclude depreciation, amortization, severance, non-
operating retirement costs and certain identified special items, as applicable. These non-GAAP financial measures
should not be considered in isolation from or as a substitute for the related GAAP measures, and should be read in
conjunction with financial information presented on a GAAP basis. For further information and reconciliations of
these non-GAAP measures to the most directly comparable GAAP measures, see “— Results of Operations — Non-
GAAP Financial Measures.”
As a result of the adoption of the ASU 2017-07 during the first quarter of 2018, the Company has recast the
Consolidated Statement of Operations for periods prior to 2018 to conform with the current period presentation.
Fiscal year 2017 comprised 53 weeks, while all other fiscal years presented in this Item 7 comprised 52 weeks.
This report includes a discussion of the estimated impact of this additional week in 2017 on our year-over-year
comparison of revenues where meaningful. Management believes that estimating the impact of the additional week
on the Company’s operating costs and operating profit presents challenges and, therefore, no such estimate is made
with respect to these items. For further detail on the impact of the additional week on our results, see the discussion
below and “— Results of Operations-Non-GAAP Financial Measures.”
2018 Financial Highlights
In 2018, diluted earnings per share from continuing operations were $0.75, compared with $0.03 for 2017.
Diluted earnings per share from continuing operations excluding severance, non-operating retirement costs and
special items discussed below (or “adjusted diluted earnings per share,” a non-GAAP measure) were $0.81 for 2018,
compared with $0.76 for 2017.
Operating profit in 2018 was $190.2 million, compared with $176.6 million for 2017. The increase was mainly
driven by higher digital subscription revenues, other revenues and digital advertising revenues, partially offset by
lower print advertising revenues and higher operating costs. Operating profit before depreciation, amortization,
severance, multiemployer pension plan withdrawal costs and special items discussed below (or “adjusted operating
profit,” a non-GAAP measure) was $262.6 million and $274.8 million for 2018 and 2017, respectively.
Total revenues increased 4.4% to $1.75 billion in 2018 from $1.68 billion in 2017 primarily driven by an increase
in digital subscription revenue as well as increases in other revenues and digital advertising revenue, partially offset
by a decrease in print advertising revenue and print subscription revenue. Total digital revenues increased to
approximately $709 million in 2018 compared with $620 million in 2017. Excluding the impact of the additional week
in 2017, estimated total revenues increased 6.2%, driven by the same factors identified above.
Subscription revenues increased 3.4% to $1.04 billion in 2018 compared with $1.01 billion in 2017, primarily due
to growth in the number of subscriptions to the Company’s digital-only products. Revenue from the Company’s
digital-only subscription products (which include our news product, as well as our Crossword and Cooking
products) increased 17.7% compared with 2017, to $400.6 million. Excluding the impact of the additional week in
P. 24 – THE NEW YORK TIMES COMPANY
2017, estimated subscription revenues and digital-only subscription revenues increased 5.3% and 20.2%, respectively,
driven by the same factors identified above.
Paid digital-only subscriptions totaled approximately 3,360,000 as of December 30, 2018, a 27.1% increase
compared with year-end 2017. News product subscriptions totaled approximately 2,713,000 at the end of 2018, a
21.6% increase compared with 2017. Other product subscriptions, which include subscriptions to our Crossword
product and Cooking product, totaled approximately 647,000 at the end of 2018, a 56.7% increase compared with 2017.
Total advertising revenues remained flat at $558.3 million in 2018 compared with 2017, reflecting a 6.5%
decrease in print advertising revenues, offset by an 8.6% increase in digital advertising revenues. The decrease in print
advertising revenues resulted from a continued decline in display advertising, primarily in the luxury and
entertainment categories. The increase in digital advertising revenues primarily reflected increases in revenue from
both direct-sold advertising and creative services, partially offset by a decrease in revenue from programmatic
advertising. Print and digital advertising revenues in 2017 also benefited from an extra week in the fiscal
year. Excluding the impact of the additional week in 2017, estimated advertising revenues increased 1.7%, driven by
the same factors identified above.
Other revenues increased 36.0% to $147.8 million in 2018 compared with $108.7 million in 2017, largely due to
growth in our commercial printing operations, affiliate referral revenue associated with the product review and
recommendation website, Wirecutter, and revenue from the rental of five and a half additional floors in our New York
headquarters building. Digital other revenues totaled $49.5 million in 2018, an 18.8% increase compared with 2017,
driven primarily by affiliate referral revenue associated with Wirecutter. Excluding the impact of the additional week
in 2017, estimated other revenues increased 36.7%, driven by the same factors identified above.
Operating costs increased in 2018 to $1.56 billion from $1.49 billion in 2017, driven by higher marketing
expenses incurred to promote our brand and products and grow our subscriber base, labor and raw material costs
related to our commercial printing operations, and costs related to our advertising business, partially offset by lower
print production and distribution costs related to our newspaper. Operating costs before depreciation, amortization,
severance and multiemployer pension plan withdrawal costs (or “adjusted operating costs,” a non-GAAP measure)
increased in 2018 to $1.49 billion from $1.40 billion in 2017.
Business Environment
We believe that a number of factors and industry trends have had, and will continue to have, an adverse effect
on our business and prospects. These include the following:
Competition in our industry
We operate in a highly competitive environment. Our print and digital products compete for subscription and
advertising revenue with both traditional and other content providers, as well as search engines and social media
platforms. Competition among companies offering online content is intense, and new competitors can quickly
emerge. Some of our current and potential competitors may have greater resources than we do, which may allow
them to compete more effectively than us.
Our ability to compete effectively depends on, among other things, our ability to continue delivering high-
quality journalism and content that is interesting and relevant to our audience; the popularity, ease of use and
performance of our products compared to those of our competitors; the engagement of our current users with our
products, and our ability to reach new users; our ability to develop, maintain and monetize our products, and the
pricing of our products; our marketing and selling efforts; the visibility of our content and products compared with
that of our competitors; our ability to provide marketers with a compelling return on their investments; our ability to
attract, retain and motivate talented employees, including journalists and product and technology specialists; our
ability to manage and grow our business in a cost-effective manner; and our reputation and brand strength compared
with those of our competitors.
Evolving subscription model
Subscription revenue is a significant source of revenue for us and an increasingly important driver as the
overall composition of our revenues has shifted in response to our “subscription-first” strategy and transformations
in our industry. The largest portion of our subscription revenue is currently from our print newspaper, where we have
experienced declining circulation volume in recent years. This is due to, among other factors, increased competition
THE NEW YORK TIMES COMPANY – P. 25
from digital media formats (which are often free to users), higher print subscription and single-copy prices and a
growing preference among some consumers to receive their news from sources other than a print newspaper.
Advances in technology have led to an increased number of methods for the delivery and consumption of news
and other content. These developments are also driving changes in the preferences and expectations of consumers as
they seek more control over how they consume content. Our ability to retain and grow our digital subscriber base
depends on, among other things, our ability to evolve our subscription model, address changing consumer demands
and developments in technology and improve our digital product offering while continuing to deliver high-quality
journalism and content that is interesting and relevant to readers. Retention and growth of our digital subscriber base
also depends on the engagement of users with our products, including the frequency, breadth and depth of their use.
Advertising market dynamics
We derive substantial revenue from the sale of advertising in our products. In determining whether to buy
advertising, our advertisers consider the demand for our products, demographics of our reader base, advertising
rates, results observed by advertisers, breadth of advertising offerings and alternative advertising options.
During 2018, the Company, along with others in the industry, continued to experience significant pressure on
print advertising revenue. Although print advertising revenue represented a majority of our total advertising revenue
in 2018, the overall proportion continues to decline. The increased popularity of digital media among consumers,
particularly as a source for news and other content, has driven a corresponding shift in demand from print
advertising to digital advertising. However, our digital advertising revenue has not replaced, and may not replace in
full, print advertising revenue lost as a result of the shift.
The digital advertising market continues to undergo significant changes. The increasing number of digital
media options available, including through social media platforms and news aggregators, has resulted in audience
fragmentation and increased competition for advertising. Competition from digital content providers and platforms,
some of which charge lower rates than we do or have greater audience reach and targeting capabilities, and the
significant increase in inventory of digital advertising space, have affected and will likely continue to affect our ability
to attract and retain advertisers and to maintain or increase our advertising rates. In recent years, large digital
platforms, such as Facebook, Google and Amazon, which have greater audience reach and targeting capabilities than
we do, have commanded an increased share of the digital display advertising market, and we anticipate that this
trend will continue. In addition, digital advertising networks and exchanges, real-time bidding and other
programmatic buying channels that allow advertisers to buy audiences at scale are playing a more significant role in
the advertising marketplace and may cause further downward pricing pressure.
The character of our digital advertising business also continues to change, as demand for newer forms of
advertising, such as branded content and other customized advertising increases. The margin on revenues from some
of these advertising forms is generally lower than the margin on revenues we generate from our print advertising and
traditional digital display advertising. Consequently, we may experience further downward pressure on our
advertising revenue margins as a greater percentage of advertising revenues comes from these newer forms.
In addition, technologies have been and will continue to be developed that enable consumers to block digital
advertising on websites and mobile devices. Advertisements blocked by these technologies are treated as not
delivered and any revenue we would otherwise receive from the advertiser for that advertisement is lost.
As the digital advertising market continues to evolve, our ability to compete successfully for advertising
budgets will depend on, among other things, our ability to engage and grow our audience and prove the value of our
advertising and the effectiveness of our platforms to advertisers.
Economic conditions
Global, national and local economic conditions affect various aspects of our business. Our subscription revenue
is sensitive to discretionary spending available to subscribers in the markets we serve, and to the extent poor
economic conditions lead consumers to reduce spending on discretionary activities, our ability to retain current
subscribers and obtain new subscribers could be hindered.
In addition, the level of advertising sales in any period may be affected by advertisers’ decisions to increase or
decrease their advertising expenditures in response to anticipated consumer demand and general economic
conditions. Changes in spending patterns and priorities, including shifts in marketing strategies and/or budget cuts
of key advertisers in response to economic conditions could have an effect on our advertising revenues.
P. 26 – THE NEW YORK TIMES COMPANY
Fixed costs
A significant portion of our expenses are fixed costs that neither increase nor decrease proportionately with
revenues. We are limited in our ability to make short-term adjustments to manage some of these costs by certain of
our collective bargaining agreements. Employee-related costs, depreciation, amortization and raw materials together
accounted for nearly half of our total operating costs in 2018.
For a discussion of these and other factors that could affect our business, results of operations and financial
condition, see “Item 1A — Risk Factors.”
Our Strategy
We continue to operate during a period of transformation in our industry, which has presented both challenges
to and opportunities for the Company. We believe that the following priorities will be key to our strategic efforts.
Providing journalism worth paying for
We believe that The Times’s original and high-quality content and journalistic excellence set us apart from other
news organizations, and that our readers are willing to pay for trustworthy, insightful and differentiated content.
During 2018, The Times again broke stories and produced investigative reports that sparked global
conversations on wide-ranging topics. Our ground-breaking journalism continues to be recognized, most notably in
the number of Pulitzer prizes The Times has received — more than any other news organization. In addition, we have
continued to make significant investments in our newsroom, adding journalistic talent across a wide range of areas —
from our business coverage to our opinion pages — and investing in new forms of visual and multimedia journalism.
Our highly popular news podcast, The Daily, which we launched in 2017, was the most downloaded podcast on
Apple’s iTunes in 2018. And during the year, we announced the development of a new TV show called The Weekly
that will launch in 2019 and provide a new platform through which to deliver our journalism.
We believe that the continued growth over the last year in subscriptions to our products demonstrates the
success of our “subscription-first” strategy and the willingness of our readers to pay for high-quality journalism. As of
December 30, 2018, we had approximately 4.3 million total subscriptions to our products, more than at any point in
our history.
In 2019, we expect to continue to make significant investments in our journalism and remain committed to
providing high-quality, trustworthy and differentiated content that we believe sets us apart.
Growing our audience and strengthening engagement to support subscription growth
We continue to focus on expanding our audience reach and strengthening the engagement of users by making
The Times an indispensable part of their daily lives. And we continue to communicate the value of independent, high-
quality journalism and why it matters.
During 2018, we continued to enhance our core news product to improve user experience and engagement, and
took further steps to build direct relationships with users to support continued subscription growth. We also invested
in brand marketing initiatives to reinforce the importance of deeply-reported independent journalism and the value
of The Times brand.
During the year, we also continued to make enhancements to our lifestyle products and services, including our
Crossword and Cooking products and Wirecutter. And we continued our efforts to grow and engage our audience
around the world, investing in, among other things, opportunities to reach more readers in the United Kingdom and
Australia. In addition, we continued to experiment with reaching new readers on third-party platforms, while
remaining focused on building direct relationships with readers on our own platforms.
Looking ahead, we will explore additional opportunities to grow and engage our audience, further innovate
our products and invest in brand marketing initiatives, while remaining committed to creating high-quality content
that sets The Times apart.
THE NEW YORK TIMES COMPANY – P. 27
Growing our long-term profitability
We are focused on becoming a more effective and efficient organization and have taken and continue to take a
number of steps to maximize the long-term profitability of the Company.
In addition to growing our digital subscription revenue, we remain committed to growing our digital
advertising revenue by developing innovative and compelling advertising offerings that integrate well with the user
experience and provide value to advertisers. We believe we have a powerful brand that, because of the quality of our
journalism, attracts educated, affluent and influential audiences, and provides a safe and trusted platform for
advertisers’ brands. We will continue to focus on leveraging our brand in developing and refining our advertising
offerings.
We are also focused on maximizing the efficiency and profitability of our print products and services, which
remains a significant part of our business.
In recent years, we have taken steps to realign our organizational structure to accelerate our digital
transformation, and we continue to optimize our product, technology and data systems, and enterprise platforms to
improve the speed with which we are able to achieve our goals.
Looking ahead, we will continue to focus on optimizing our organizational and cost structure to support long-
term profitable growth.
Effectively managing our liquidity and our non-operating costs
We have continued to strengthen our liquidity position and further de-leverage and de-risk our balance sheet.
As of December 30, 2018, the Company had cash and cash equivalents and marketable securities of approximately
$826 million, which exceeded our total debt and capital lease obligations by approximately $573 million. We believe
our cash balance and cash provided by operations, in combination with other sources of cash, will be sufficient to
meet our financing needs over the next 12 months.
In March 2009, we entered into an agreement to sell and simultaneously lease back the Condo Interest in our
headquarters building. The sale price for the Condo Interest was $225.0 million less transaction costs, for net proceeds
of approximately $211 million. We have an option, exercisable in the fourth quarter of 2019, to repurchase the Condo
Interest for $250.0 million, and we have provided notice of our intent to exercise this option. We believe exercising this
option is in the best interest of the Company given that the market value of the Condo Interest exceeds the exercise
price.
In addition, we remain focused on managing our pension plan obligations. Our qualified pension plans were
underfunded (meaning the present value of future benefits obligations exceeded the fair value of plan assets) as of
December 30, 2018, by approximately $81 million, compared with approximately $69 million as of December 31, 2017.
We made contributions of approximately $8 million to certain qualified pension plans in 2018, compared with
approximately $128 million, including discretionary contributions of $120 million, in 2017. We expect contributions
made in 2019 to satisfy minimum funding requirements to total approximately $9 million.
We have taken steps over the last several years to reduce the size and volatility of our pension obligations,
including freezing accruals under all but one of our qualified defined benefit pension plans, which cover both our
non-union employees and those covered by certain collective bargaining agreements, and making immediate pension
benefits offers in the form of lump-sum payments to certain former employees. During 2017, we entered into
agreements to transfer certain future benefit obligations and administrative costs to insurers, which allowed us to
reduce our overall qualified pension plan obligations by approximately $263 million. See Note 10 of the Notes to the
Consolidated Financial Statements for additional information on these actions. We will continue to look for ways to
reduce the size and volatility of our pension obligations.
While we have made significant progress in our liability-driven investment strategy to reduce the funding
volatility of our qualified pension plans, the size of our pension plan obligations relative to the size of our current
operations will continue to have a significant impact on our reported financial results. We expect to continue to
experience volatility in our retirement-related costs, including pension, multiemployer pension and retiree medical
costs.
P. 28 – THE NEW YORK TIMES COMPANY
RESULTS OF OPERATIONS
Overview
Fiscal years 2018 and 2016 each comprised 52 weeks and fiscal year 2017 comprised 53 weeks. The following
table presents our consolidated financial results:
(In thousands)
Revenues
Subscription
Advertising
Other
Total revenues
Operating costs
Production costs:
Wages and benefits
Raw materials
Other production costs
Total production costs
Selling, general and administrative costs
Depreciation and amortization
Total operating costs (1)
Headquarters redesign and consolidation
Restructuring charge
Years Ended
% Change
December 30,
2018
December 31,
2017
December 25,
2016
2018 vs.
2017
2017 vs.
2016
(52 weeks)
(53 weeks)
(52 weeks)
$
1,042,571
$
1,008,431
$
880,543
558,253
147,774
558,513
108,695
580,732
94,067
1,748,598
1,675,639
1,555,342
380,678
76,542
196,956
654,176
845,591
59,011
363,686
66,304
186,352
616,342
815,065
61,871
364,302
72,325
192,728
629,355
728,338
61,723
1,558,778
1,493,278
1,419,416
3.4
*
36.0
4.4
4.7
15.4
5.7
6.1
3.7
(4.6)
4.4
4,504
—
10,090
—
8,274
10,764
16,566
176,091
48,631
127,460
—
127,460
(1,776)
64,225
18,641
19,783
111,224
103,956
7,268
(431)
6,837
(2,541)
—
(55.4)
16,518
6,730
112,678
11,074
(36,273)
34,805
30,526
4,421
26,105
(2,273)
23,832
5,236
*
12.3
7.7
(87.1)
(42.3)
(16.3)
58.3
(53.2)
*
*
*
(30.1)
14.5
(3.8)
15.6
7.7
(0.2)
(8.3)
(3.3)
(2.1)
11.9
0.2
5.2
*
*
*
56.7
*
*
(43.2)
*
*
(72.2)
(81.0)
(71.3)
*
Multiemployer pension and other contractual (gain)/loss (1)
(4,851)
(4,320)
Operating profit (1)
190,167
176,591
Other components of net periodic benefit costs (1)
Gain/(loss) from joint ventures
Interest expense and other, net
Income from continuing operations before income taxes
Income tax expense
Income from continuing operations
Loss from discontinued operations, net of income taxes
Net income
Net (income)/loss attributable to the noncontrolling interest
Net income attributable to The New York Times Company
common stockholders
$
125,684
$
4,296
$
29,068
*
(85.2)
* Represents a change equal to or in excess of 100% or one that is not meaningful.
(1) As a result of the adoption of ASU 2017-07 during the first quarter of 2018, the service cost component of net periodic benefit costs/(income)
from our pension and other postretirement benefits plans will continue to be presented within operating costs, while the other components of
net periodic benefits costs/(income) such as interest cost, amortization of prior service credit and gains or losses from our pension and other
postretirement benefits plans will be separately presented outside of “Operating costs” in the new line item “Other components of net periodic
benefits costs/(income)”. The Company has recast the Consolidated Statement of Operations for the respective prior periods presented to
conform with the current period presentation. Costs associated with multiemployer pension plans were not addressed in ASU 2017-07, and
continue to be included in operating costs, except as separately disclosed.
THE NEW YORK TIMES COMPANY – P. 29
Revenues
Subscription, advertising and other revenues were as follows:
(In thousands)
Subscription
Advertising
Other
Total
Subscription Revenues
Years Ended
% Change
December 30,
2018
December 31,
2017
December 25,
2016
2018 vs.
2017
2017 vs.
2016
(52 weeks)
(53 weeks)
(52 weeks)
$
1,042,571
$
1,008,431
$
880,543
558,253
147,774
558,513
108,695
580,732
94,067
$
1,748,598
$
1,675,639
$
1,555,342
3.4
—
36.0
4.4
14.5
(3.8)
15.6
7.7
Subscription revenues consist of revenues from subscriptions to our print and digital products (which include
our news product, as well as our Crossword and Cooking products), and single-copy and bulk sales of our print
products (which represent less than 10% of these revenues). Our Cooking product first launched as a paid digital
product in the third quarter of 2017. Subscription revenues are based on both the number of copies of the printed
newspaper sold and digital-only subscriptions, and the rates charged to the respective customers.
The following table summarizes digital-only subscription revenues for the years ended December 30, 2018,
December 31, 2017, and December 25, 2016:
(In thousands)
Digital-only subscription revenues:
News product subscription revenues(1)
Other product subscription revenues(2)
Total digital-only subscription revenues
Years Ended
% Change
December 30,
2018
December 31,
2017
December 25,
2016
2018 vs.
2017
2017 vs.
2016
(52 weeks)
(53 weeks)
(52 weeks)
$
$
378,484
$
325,956
$
223,459
22,136
14,387
9,369
400,620
$
340,343
$
232,828
16.1
53.9
17.7
45.9
53.6
46.2
(1) Includes revenues from subscriptions to the Company’s news product. News product subscription packages that include access to the
Company’s Crossword and Cooking products are also included in this category.
(2) Includes revenues from standalone subscriptions to the Company’s Crossword and Cooking products.
The following table summarizes digital-only subscriptions as of December 30, 2018, December 31, 2017, and
December 25, 2016:
(In thousands)
Digital-only subscriptions:
News product subscriptions(1)
Other product subscriptions(2)
Total digital-only subscriptions
As of
% Change
December 30,
2018
December 31,
2017
December 25,
2016
2018 vs.
2017
2017 vs.
2016
(52 weeks)
(53 weeks)
(52 weeks)
2,713
647
3,360
2,231
413
2,644
1,618
247
1,865
21.6
56.7
27.1
37.9
67.2
41.8
(1) Includes subscriptions to the Company’s news product. News product subscription packages that include access to the Company’s Crossword
and Cooking products are also included in this category.
(2) Includes standalone subscriptions to the Company’s Crossword and Cooking products.
P. 30 – THE NEW YORK TIMES COMPANY
2018 Compared with 2017
Subscription revenues increased 3.4% in 2018 compared with 2017. The increase was primarily driven by
significant growth in the number of digital-only subscriptions, which led to digital-only subscription revenue growth
of approximately 18%, partially offset by a decline in print subscription revenue of approximately 4%. Print
subscription revenue decreased due to a decline of approximately 6% in home-delivery subscriptions and a decrease
of approximately 7% in single-copy and bulk sales revenue, partially offset by an increase of approximately 6% in
home-delivery prices for The New York Times newspaper. Excluding the impact of the additional week in 2017,
estimated subscription revenues and digital-only subscription revenues increased 5.3% and 20.2%, respectively,
driven by the same factors identified above.
2017 Compared with 2016
Subscription revenues increased 14.5% in 2017 compared with 2016. The increase was primarily driven by
significant growth in the number of digital-only subscriptions, which led to digital-only subscription revenue growth
of approximately 46%, as well as an increase of approximately 7% in home-delivery prices for The New York Times
newspaper, which more than offset a decline of approximately 1% in home-delivery subscriptions. Excluding the
impact of the additional week in 2017, estimated subscription revenues and digital-only subscription revenues
increased 12.4% and 43.1%, respectively, driven by the same factors identified above.
Advertising Revenues
Advertising revenues are derived from the sale of our advertising products and services on our print and
digital platforms. These revenues are primarily determined by the volume, rate and mix of advertisements. Display
advertising revenue is principally from advertisers promoting products, services or brands in print in the form of
column-inch ads, and on our digital platforms in the form of banners, video, rich media and other interactive ads.
Display advertising also includes branded content on The Times’s platforms. Other advertising primarily represents,
for our print products, classified advertising revenue, including line-ads sold in the major categories of real estate,
help wanted, automotive and other as well as revenue from preprinted advertising, also known as free-standing
inserts. Digital other advertising revenue primarily includes creative services fees associated with, among other
things, our digital marketing agencies and our branded content studio; advertising revenue from our podcasts; and
advertising revenue generated by Wirecutter, our product review and recommendation website.
2018 Compared with 2017
Years Ended
December 30, 2018
December 31, 2017
% Change
(52 weeks)
(53 weeks)
(In thousands)
Print
Digital
Total
Print
Digital
Total
Print
Digital
Total
Display
Other
$ 269,160
$ 202,038
$ 471,198
$ 285,679
$ 198,658
$ 484,337
(5.8)%
30,220
56,835
87,055
34,543
39,633
74,176
(12.5)%
Total advertising
$ 299,380
$ 258,873
$ 558,253
$ 320,222
$ 238,291
$ 558,513
(6.5)%
1.7%
43.4%
8.6%
(2.7)%
17.4 %
— %
Print advertising revenues, which represented 54% of total advertising revenues in 2018, declined 6.5% to $299.4
million in 2018 compared with $320.2 million in 2017. The decrease was driven by a continued decline in display
advertising revenue, primarily in the luxury and entertainment categories, as well as a decline in classified
advertising revenue, primarily in the real estate category. Excluding the impact of the additional week in 2017,
estimated print advertising revenues declined 5.3%, driven by the same factors identified above.
Digital advertising revenues, which represented 46% of total advertising revenues in 2018, increased 8.6% to
$258.9 million in 2018 compared with $238.3 million in 2017. The increase primarily reflected increases in revenue
from both direct-sold advertising and creative services, partially offset by a decrease in revenue from programmatic
advertising. Excluding the impact of the additional week in 2017, estimated digital advertising revenues increased
11.3%, driven by the same factors identified above.
THE NEW YORK TIMES COMPANY – P. 31
2017 Compared with 2016
Years Ended
December 31, 2017
December 25, 2016
% Change
(53 weeks)
(52 weeks)
(In thousands)
Print
Digital
Total
Print
Digital
Total
Print
Digital
Total
Display
Other
$ 285,679
$ 198,658
$ 484,337
$ 335,652
$ 181,545
$ 517,197
(14.9)%
34,543
39,633
74,176
36,328
27,207
63,535
(4.9)%
Total advertising
$ 320,222
$ 238,291
$ 558,513
$ 371,980
$ 208,752
$ 580,732
(13.9)%
9.4%
45.7%
14.2%
(6.4)%
16.7 %
(3.8)%
Print advertising revenues, which represented 57% of total advertising revenues in 2017, declined 13.9% to
$320.2 million in 2017 compared with $372.0 million in 2016. The decrease was driven by a continued decline in
display advertising revenue, primarily in the luxury, travel and real estate categories. Excluding the impact of the
additional week in 2017, estimated print advertising revenues declined 15.0%, driven by the same factors identified
above.
Digital advertising revenues, which represented 43% of total advertising revenues in 2017, increased 14.2% to
$238.3 million in 2017 compared with $208.8 million in 2016. The increase primarily reflected increases in display
advertising revenue from mobile advertising and branded content, as well as an increase in other advertising revenue,
primarily associated with growth in creative services fees. This was partially offset by a continued decline in
traditional website display advertising. Excluding the impact of the additional week in 2017, estimated digital
advertising revenues increased 11.5%, driven by the same factors identified above.
Other Revenues
Other revenues primarily consist of revenues from licensing, affiliate referrals, building rental revenue,
commercial printing, NYT Live (our live events business) and retail commerce. Digital other revenues consists
primarily of digital archive licensing and affiliate referral revenue. Building rental revenue consists of revenue from
the lease of floors in our New York headquarters building, which totaled $23.3 million, $16.7 million and $17.1 million
in 2018, 2017 and 2016, respectively.
2018 Compared with 2017
Other revenues increased 36.0% in 2018 compared with 2017 largely due to growth in our commercial printing
operations, affiliate referral revenue associated with our product review and recommendation website, Wirecutter,
and higher rental revenue from the lease of additional space in our New York headquarters building. Digital other
revenues totaled $49.5 million in 2018, an 18.8% increase compared with 2017, driven primarily by affiliate referral
revenue associated with Wirecutter. Excluding the impact of the additional week in 2017, estimated other revenues
increased 36.7%, driven by the same factors identified above.
2017 Compared with 2016
Other revenues increased 15.6% in 2017 compared with 2016 largely due to affiliate referral revenue associated
with Wirecutter, which the Company acquired in October 2016. Digital other revenues totaled $41.7 million in 2017, a
83.7% increase compared with 2016, driven primarily by affiliate referral revenue associated with Wirecutter.
Excluding the impact of the additional week in 2017, estimated other revenues increased 14.9%, driven by the same
factor identified above.
P. 32 – THE NEW YORK TIMES COMPANY
Operating Costs
Operating costs were as follows:
(In thousands)
Production costs:
Wages and benefits
Raw materials
Other production costs
Total production costs
Selling, general and administrative costs
Depreciation and amortization
Years Ended
% Change
December 30,
2018
December 31,
2017
December 25,
2016
2018 vs.
2017
2017 vs.
2016
(52 weeks)
(53 weeks)
(52 weeks)
$
380,678
$
363,686
$
364,302
76,542
196,956
654,176
845,591
59,011
66,304
186,352
616,342
815,065
61,871
72,325
192,728
629,355
728,338
61,723
4.7
15.4
5.7
6.1
3.7
(4.6)
4.4
(0.2)
(8.3)
(3.3)
(2.1)
11.9
0.2
5.2
Total operating costs
$
1,558,778
$
1,493,278
$
1,419,416
The components of operating costs as a percentage of total operating costs were as follows:
Components of operating costs as a percentage of total operating costs
Wages and benefits
Raw materials
Other operating costs
Depreciation and amortization
Total
Years Ended
December 30,
2018
December 31,
2017
December 25,
2016
(52 weeks)
(53 weeks)
(52 weeks)
44%
5%
47%
4%
46%
4%
46%
4%
45%
5%
46%
4%
100%
100%
100%
The components of operating costs as a percentage of total revenues were as follows:
Components of operating costs as a percentage of total revenues
Wages and benefits
Raw materials
Other operating costs
Depreciation and amortization
Total
Years Ended
December 30,
2018
December 31,
2017
December 25,
2016
(52 weeks)
(53 weeks)
(52 weeks)
40%
4%
42%
3%
89%
40%
4%
41%
4%
89%
41%
5%
41%
4%
91%
THE NEW YORK TIMES COMPANY – P. 33
Production Costs
Production costs include items such as labor costs, raw materials and machinery and equipment expenses
related to news gathering and production activity, as well as costs related to producing branded content.
2018 Compared with 2017
Production costs increased in 2018 compared with 2017, primarily driven by increases in wages and benefits
(approximately $17 million), raw materials expense (approximately $10 million) and outside services costs
(approximately $10 million). Wages and benefits increased primarily as a result of increased hiring to support the
Company’s initiatives. Raw materials expense increased due to increased commercial printing activity and higher
newsprint prices. Outside services costs increased primarily due to higher costs associated with the generation of
content in our newsroom.
2017 Compared with 2016
Production costs decreased in 2017 compared with 2016, primarily driven by a decrease in other production
costs (approximately $6 million) and raw materials expense (approximately $6 million). Other production costs
decreased primarily as a result of lower outside printing expenses (approximately $5 million). Raw materials expense
decreased primarily due to lower newsprint consumption (approximately $6 million).
Selling, General and Administrative Costs
Selling, general and administrative costs include costs associated with the selling, marketing and distribution of
products as well as administrative expenses.
2018 Compared with 2017
Selling, general and administrative costs increased in 2018 compared with 2017, primarily due to an increase in
promotion and marketing costs (approximately $46 million), partially offset by a decrease in outside services
(approximately $7 million) and distribution costs (approximately $6 million). Promotion and marketing costs
increased due to increased spending to promote our subscription business and brand. Outside services decreased
primarily due to lower consulting fees, and distribution costs decreased as a result of fewer print copies produced.
2017 Compared with 2016
Selling, general and administrative costs increased in 2017 compared with 2016, primarily due to an increase in
compensation costs (approximately $47 million), promotion and marketing costs (approximately $26 million) and
severance costs (approximately $5 million). Compensation costs increased primarily as a result of higher incentive
compensation, increased hiring to support growth initiatives and higher benefit costs. Promotion and marketing costs
increased due to increased spending related to promotion of our subscription business and brand. Severance costs
increased due to a workforce reduction announced in the second quarter of 2017 primarily affecting the newsroom.
Depreciation and Amortization
2018 Compared with 2017
Depreciation and amortization costs decreased in 2018 compared with 2017 due to disposals of fixed assets in
connection with our headquarters redesign and consolidation project.
2017 Compared with 2016
Depreciation and amortization costs were flat in 2017 compared with 2016.
Other Items
See Note 8 of the Notes to the Consolidated Financial Statements for more information regarding other items.
P. 34 – THE NEW YORK TIMES COMPANY
NON-OPERATING ITEMS
Investments in Joint Ventures
See Note 6 of the Notes to the Consolidated Financial Statements for information regarding our joint venture
investments.
Interest Expense and Other, Net
See Note 7 of the Notes to the Consolidated Financial Statements for information regarding interest expense and
other.
Income Taxes
See Note 13 of the Notes to the Consolidated Financial Statements for information regarding income taxes.
Discontinued Operations
See Note 14 of the Notes to the Consolidated Financial Statements for information regarding discontinued
operations.
Other Components of Net Periodic Benefit Costs
See Note 10 and 11 of the Notes the Consolidated Financial Statements for information regarding other
components of net periodic benefit costs.
Non-GAAP Financial Measures
We have included in this report certain supplemental financial information derived from consolidated financial
information but not presented in our financial statements prepared in accordance with GAAP. Specifically, we have
referred to the following non-GAAP financial measures in this report:
• diluted earnings per share from continuing operations excluding severance, non-operating retirement costs
and the impact of special items (or adjusted diluted earnings per share from continuing operations);
• operating profit before depreciation, amortization, severance, multiemployer pension plan withdrawal costs
and special items (or adjusted operating profit); and
• operating costs before depreciation, amortization, severance and multiemployer pension plan withdrawal
costs (or adjusted operating costs).
The special items in 2018 consisted of:
• an $11.3 million pre-tax gain ($7.1 million or $.04 per share after tax and net of noncontrolling interest)
reflecting our proportionate share of a distribution from the sale of assets by Madison, in which the Company
has an investment through a subsidiary;
• a $4.9 million pre-tax gain ($3.6 million after tax or $.02 per share) from a multiemployer pension plan liability
adjustment; and
• a $4.5 million pre-tax charge ($3.3 million after tax or $.02 per share) in connection with the redesign and
consolidation of space in our headquarters building.
The special items in 2017 consisted of:
• $102.1 million of pre-tax pension settlement charges ($61.5 million after tax, or $.37 per share) in connection
with the transfer of certain pension benefit obligations to insurers (in connection with the adoption of ASU
2017-07 this amount was reclassified to “Other components of net periodic benefit costs” below “Operating
profit”);
• a $68.7 million charge ($.42 per share) primarily attributable to the remeasurement of our net deferred tax
assets required as a result of recent tax legislation;
• a $37.1 million pre-tax gain ($22.3 million after tax, or $.14 per share) primarily in connection with the
settlement of contractual funding obligations for a postretirement plan (in connection with the adoption of
ASU 2017-07, $32.7 million relating to the postretirement plan was reclassified to “Other components of net
THE NEW YORK TIMES COMPANY – P. 35
periodic benefit costs” below Operating profit while the contractual gain of $4.3 million remains in
“Multiemployer pension and other contractual gains” within “Operating profit”);
• a $15.3 million pre-tax net gain ($7.8 million after tax and net of noncontrolling interest, or $.05 per share) from
joint ventures consisting of (i) a $30.1 million gain related to the sale of the remaining assets of Madison, (ii) an
$8.4 million loss reflecting our proportionate share of Madison’s settlement of pension obligations, and (iii) a
$6.4 million loss from the sale of our 49% equity interest in Malbaie; and
• a $10.1 million pre-tax charge ($6.1 million after tax, or $.04 per share) in connection with the redesign and
consolidation of space in our headquarters building.
The special items in 2016 consisted of:
• a $37.5 million pre-tax loss ($17.7 million after tax and net of noncontrolling interest, or $.11 per share) from
joint ventures related to the announced closure of the paper mill operated by Madison;
• a $21.3 million pre-tax pension settlement charge ($12.8 million after tax, or $.08 per share) in connection with
lump-sum payments made under an immediate pension benefits offer to certain former employees (in
connection with the adoption of ASU 2017-07 this amount was reclassified to “Other components of net
periodic benefit costs” below “Operating profit”);
• a $16.5 million pre-tax charge ($9.8 million after tax, or $.06 per share) in connection with the streamlining of
the Company’s international print operations (primarily consisting of severance costs); (in connection with the
adoption of ASU 2017-07, $1.7 million related to a gain from the pension curtailment previously included in
this special item was reclassified to “Other components of net periodic benefit costs” below “Operating
profit”);
• a $6.7 million pre-tax charge ($4.0 million after tax, or $.02 per share) for a partial withdrawal obligation under
a multiemployer pension plan following an unfavorable arbitration decision; and
• a $3.8 million income tax benefit ($.02 per share) primarily due to a reduction in the Company’s reserve for
uncertain tax positions.
We have included these non-GAAP financial measures because management reviews them on a regular basis
and uses them to evaluate and manage the performance of our operations. We believe that, for the reasons outlined
below, these non-GAAP financial measures provide useful information to investors as a supplement to reported
diluted earnings/(loss) per share from continuing operations, operating profit/(loss) and operating costs. However,
these measures should be evaluated only in conjunction with the comparable GAAP financial measures and should not
be viewed as alternative or superior measures of GAAP results.
In connection with the adoption of ASU 2017-07 in the first quarter of 2018, the Company modified its definitions
of adjusted operating profit, adjusted operating costs and non-operating retirement costs in response to changes in the
GAAP presentation of single employer pension and postretirement benefit costs. For comparability purposes, the
Company has also presented each of its non-GAAP financial measures for the years ended 2017 and 2016, reflecting the
recast of its financial statements for such periods to account for the adoption of ASU 2017-07 and the revised
definitions of the non-GAAP financial measures for more details.
As a result of the adoption of ASU 2017-07 during the first quarter of 2018, all single employer pension and other
postretirement benefit expenses with the exception of service cost were reclassified from operating costs to “Other
components of net periodic benefit costs/(income).” See Note 2 of the Notes to the Consolidated Financial Statements
for more information. In connection with the adoption of ASU 2017-07, the Company made the following changes to its
non-GAAP financial measures in order to align them with the new GAAP presentation:
•
•
revised the components of non-operating retirement costs to include amortization of prior service credit of
single employer pension and other postretirement benefit expenses; and
revised the definition of adjusted operating costs to exclude only multiemployer pension plan withdrawal
costs (which historically have been and continue to be a component of non-operating retirement costs), rather
than all non-operating retirement costs. As a result of the adoption of ASU 2017-07, non-operating retirement
costs other than multiemployer pension plan withdrawal costs are now separately presented outside of
operating costs and accordingly have no impact on operating profit and cost under GAAP, or adjusted
P. 36 – THE NEW YORK TIMES COMPANY
operating profit or adjusted operating costs. Multiemployer pension plan withdrawal costs remain in GAAP
operating costs and therefore continue to be an adjustment to these non-GAAP measures.
Non-operating retirement costs include:
•
•
interest cost, expected return on plan assets and amortization of actuarial gains and loss components and
amortization of prior service credits of single employer pension expense;
interest cost and amortization of actuarial gains and loss components and amortization of prior service credits
of retirement medical expense; and
• all multiemployer pension plan withdrawal costs.
These non-operating retirement costs are primarily tied to financial market performance and changes in market
interest rates and investment performance. Management considers non-operating retirement costs to be outside the
performance of the business and believes that presenting adjusted diluted earnings per share from continuing
operations excluding non-operating retirement costs and presenting adjusted operating results excluding
multiemployer pension plan withdrawal costs, in addition to the Company’s GAAP diluted earnings per share from
continuing operations and GAAP operating results, provide increased transparency and a better understanding of the
underlying trends in the Company’s operating business performance.
Adjusted diluted earnings per share provides useful information in evaluating the Company’s period-to-period
performance because it eliminates items that the Company does not consider to be indicative of earnings from ongoing
operating activities. Adjusted operating profit is useful in evaluating the ongoing performance of the Company’s
business as it excludes the significant non-cash impact of depreciation and amortization as well as items not indicative
of ongoing operating activities. Total operating costs include depreciation, amortization, severance and multiemployer
pension plan withdrawal costs. Total operating costs excluding these items provide investors with helpful
supplemental information on the Company’s underlying operating costs that is used by management in its financial
and operational decision-making.
Management considers special items, which may include impairment charges, pension settlement charges and
other items that arise from time to time, to be outside the ordinary course of our operations. Management believes that
excluding these items provides a better understanding of the underlying trends in the Company’s operating
performance and allows more accurate comparisons of the Company’s operating results to historical performance. In
addition, management excludes severance costs, which may fluctuate significantly from quarter to quarter, because it
believes these costs do not necessarily reflect expected future operating costs and do not contribute to a meaningful
comparison of the Company’s operating results to historical performance.
Reconciliations of non-GAAP financial measures from, respectively, diluted earnings per share from continuing
operations, operating profit and operating costs, the most directly comparable GAAP items, as well as details on the
components of non-operating retirement costs, are set out in the tables below.
THE NEW YORK TIMES COMPANY – P. 37
Reconciliation of diluted earnings per share from continuing operations excluding severance, non-operating retirement costs and special
items (or adjusted diluted earnings per share from continuing operations)
Years Ended
% Change
December 30,
2018
December 31,
2017
(1) December 25,
2016
(1)
2018 vs.
2017
2017 vs.
2016
(52 weeks)
(53 weeks)
(52 weeks)
Diluted earnings per share from continuing operations
$
0.75
$
0.03
$
0.19
*
(84.2%)
Add:
Severance
Non-operating retirement costs
Special items:
Headquarters redesign and consolidation
Restructuring charge
Pension settlement charge
Postretirement benefit plan settlement gain, multiemployer
and other contractual (gain)/loss
(Gain)/loss in joint ventures, net of noncontrolling interest
Income tax expense of adjustments
Reduction in reserve for uncertain tax positions
Deferred tax asset remeasurement adjustment
Adjusted diluted earnings per share from continuing
operations
0.04
0.09
0.03
—
—
(0.03)
(0.06)
(0.02)
—
—
0.15
0.01
0.06
—
0.62
(0.23)
(0.08)
(0.22)
—
0.42
0.12
0.03
—
0.10
0.13
0.04
0.18
(73.3%)
25.0%
*
(66.7%)
(50.0%)
*
*
(87.0)%
(25.0%)
*
*
*
*
*
(0.24)
(90.9)%
(8.3)%
(0.02)
—
*
*
*
*
$
0.81
$
0.76
$
0.53
6.6 %
43.4 %
* Represents a change equal to or in excess of 100% or one that is not meaningful.
(1) Revised to reflect recast of GAAP results to conform with current period presentation and the revised definition of non-operating retirement costs.
See “—Impact of Modification of Non-GAAP Measures” for more detail.
(2) Amounts may not add due to rounding.
P. 38 – THE NEW YORK TIMES COMPANY
Reconciliation of operating profit before depreciation & amortization, severance, multiemployer pension plan withdrawal costs and
special items (or adjusted operating profit)
(In thousands)
Operating profit
Add:
Depreciation & amortization
Severance
Multiemployer pension plan withdrawal costs
Special items:
Headquarters redesign and consolidation
Restructuring charge
Years Ended
% Change
December 30,
2018
December 31,
2017
(1) December 25,
2016
(1)
2018 vs.
2017
2017 vs.
2016
(52 weeks)
(53 weeks)
(52 weeks)
$
190,167
176,591
112,678
7.7 %
56.7 %
59,011
6,736
7,002
4,504
—
61,871
23,949
6,599
10,090
—
61,723
(4.6%)
0.2%
18,829
(71.9%)
27.2%
14,001
6.1 %
(52.9)%
—
(55.4)%
16,518
*
*
*
*
Multiemployer pension and other contractual (gain)/loss
(4,851)
(4,320)
6,730
12.3 %
Adjusted operating profit
$
262,569
$
274,780
$
230,479
(4.4)%
19.2 %
* Represents a change equal to or in excess of 100% or one that is not meaningful.
(1) Revised to reflect recast of GAAP results to conform with current period presentation and the revised definition of non-operating retirement costs.
See “—Impact of Modification of Non-GAAP Measures” for more detail.
Reconciliation of operating costs before depreciation & amortization, severance and multiemployer pension plan withdrawal costs (or
adjusted operating costs)
(In thousands)
Operating costs
Less:
Years Ended
% Change
December 30,
2018
December 31,
2017
(1) December 25,
2016
(1)
2018 vs.
2017
2017 vs.
2016
(52 weeks)
(53 weeks)
(52 weeks)
$
1,558,778
$
1,493,278
$
1,419,416
4.4 %
5.2 %
Depreciation & amortization
Severance
Multiemployer pension plan withdrawal costs
59,011
6,736
7,002
61,871
23,949
6,599
61,723
(4.6%)
0.2%
18,829
(71.9%)
27.2%
14,001
6.1 %
(52.9)%
Adjusted operating costs
$
1,486,029
$ 1,400,859
$
1,324,863
6.1 %
5.7 %
* Represents a change equal to or in excess of 100% or one that is not meaningful.
(1) Revised to reflect recast of GAAP results to conform with current period presentation and the revised definition of non-operating retirement costs.
See “—Impact of Modification of Non-GAAP Measures” for more detail.
THE NEW YORK TIMES COMPANY – P. 39
Reconciliation of revenues excluding the estimated impact of the additional week (in thousands)
Subscription
Advertising
Other
Total revenues
Subscription
Advertising
Other
Total revenues
Print advertising revenue
Digital advertising revenue
Total advertising revenue
Print advertising revenue
Digital advertising revenue
Total advertising revenue
Twelve Months
2018
2017
As Reported
Additional
Week
2017 Adjusted
% Change
(52 weeks)
(53 weeks)
(52 weeks)
$
1,042,571
$
1,008,431
$
(18,453) $
989,978
558,253
147,774
558,513
108,695
(9,821)
(598)
548,692
108,097
$
1,748,598
$
1,675,639
$
(28,872) $
1,646,767
5.3 %
1.7 %
36.7 %
6.2 %
Twelve Months
2017
As Reported
Additional
Week
2017 Adjusted
2016
% Change
(53 weeks)
(52 weeks)
(52 weeks)
$
1,008,431
$
(18,453) $
989,978
$
880,543
558,513
108,695
(9,821)
(598)
548,692
108,097
580,732
94,067
$
1,675,639
$
(28,872) $
1,646,767
$
1,555,342
12.4 %
(5.5)%
14.9 %
5.9 %
Twelve Months
2018
2017
As Reported
Additional
Week
2017 Adjusted
% Change
(52 weeks)
(53 weeks)
(52 weeks)
$
$
299,380
$
320,222
$
(4,222) $
316,000
258,873
238,291
(5,599)
232,692
558,253
$
558,513
$
(9,821) $
548,692
(5.3)%
11.3 %
1.7 %
Twelve Months
2017
As Reported
Additional
Week
2017 Adjusted
2016
% Change
(53 weeks)
(52 weeks)
(52 weeks)
$
$
320,222
$
(4,222) $
316,000
$
371,980
238,291
(5,599)
232,692
208,752
558,513
$
(9,821) $
548,692
$
580,732
(15.0)%
11.5 %
(5.5)%
Twelve Months
2018
2017
As Reported
Additional
Week
2017 Adjusted
% Change
(52 weeks)
(53 weeks)
(52 weeks)
Total digital-only subscription revenues
$
400,620
$
340,343
$
(7,056) $
333,287
20.2%
Total digital-only subscription revenues
$
340,343
$
(7,056) $
333,287
$
232,828
43.1%
Twelve Months
2017
As Reported
Additional
Week
2017 Adjusted
2016
% Change
(53 weeks)
(52 weeks)
(52 weeks)
P. 40 – THE NEW YORK TIMES COMPANY
Impact of Modification of Non-GAAP Measures
In connection with the adoption of ASU 2017-07 in the first quarter of 2018, the Company modified its definitions
of adjusted operating profit, adjusted operating costs and non-operating retirement costs in response to changes in the
GAAP presentation of single employer pension and postretirement benefit costs. For comparability purposes, the
Company has presented its non-GAAP financial measures for the first twelve months of 2017 and 2016, reflecting the
recast of its financial statements for such periods to account for the adoption of ASU 2017-07 and the revised
definitions of the non-GAAP financial measures. The following tables show the adjustments to the previously
presented metrics.
Adjustments made to the reconciliation of diluted earnings per share from continuing operations to adjusted diluted earnings per
share from continuing operations
Twelve Months
Twelve Months
2017
Previously
Reported
Adjustment
2017
Recast
2016
Previously
Reported
Adjustment
2016
Recast
$
0.03
$
—
$
0.03
$
0.19
$
0.15
0.07
0.06
—
0.62
(0.23)
(0.08)
(0.24)
—
0.42
—
(0.06) (1)
—
—
—
—
—
0.02
—
—
0.15
0.01
0.06
—
0.62
(0.23)
(0.08)
(0.22)
—
0.42
0.12
0.10
—
0.09
0.13
0.04
0.18
(0.26)
(0.02)
—
—
—
(0.07) (1)
—
0.01
—
—
—
0.02
—
—
0.19
0.12
0.03
—
0.10
0.13
0.04
0.18
(0.24)
(0.02)
—
$
0.80
$
(0.04)
$
0.76
$
0.57
$
(0.04)
0.53
Diluted earnings per share from
continuing operations
Add:
Severance
Non-operating retirement costs
Special items:
Headquarters redesign and
consolidation
Restructuring charge
Pension settlement expense
Postretirement benefit plan
settlement gain,
multiemployer and other
contractual (gain)/loss
(Gain)/loss in joint ventures,
net of noncontrolling interest
Income tax expense of
adjustments
Reduction in uncertain tax
positions
Deferred tax asset
remeasurement adjustment
Adjusted diluted earnings per
share from continuing
operations(2)
(1) Reflects the inclusion of amortization of prior service credits in the definition of non-operating retirement costs.
(2) Amounts may not add due to rounding.
THE NEW YORK TIMES COMPANY – P. 41
Adjustments made to the reconciliation of operating profit to adjusted operating profit
(In thousands)
Operating profit
Add:
Depreciation & amortization
Severance
Non-operating retirement costs
Multiemployer pension plan
withdrawal costs (excluding
special items)
Special items:
Headquarters redesign and
consolidation
Restructuring charge
Multiemployer pension and
other contractual (gain)/loss
Pension settlement expense
Twelve Months
Twelve Months
2017
Previously
Reported
Adjustment
2017
Recast
2016
Previously
Reported
Adjustment
2016
Recast
$
112,366
$
64,225 (1) $
176,591
$
101,604
$
11,074 (1) $
112,678
61,871
23,949
11,152
—
—
(11,152) (2)
61,871
23,949
—
—
6,599 (2)
6,599
10,090
—
(37,057)
102,109
—
—
32,737 (1)
(102,109) (1)
10,090
*
(4,320)
—
61,723
18,829
15,880
—
—
14,804
6,730
21,294
—
—
(15,880) (2)
61,723
18,829
—
14,001 (2)
14,001
—
1,714
—
(21,294) (1)
(10,385) (3) $
—
16,518
6,730
—
230,479
Adjusted operating profit
$
284,480
$
(9,700) (3) $
274,780
$
240,864
$
(1) Recast as a result of the adoption of ASU 2017-07. See Note 2 of the Notes to the Consolidated Financial Statements for more information.
(2) As a result of the change in definition of adjusted operating profit, only multiemployer pension plan withdrawal costs, rather than all non-
operating retirement costs, are excluded from adjusted operating profit.
(3) Represents amortization of prior service credits, which historically were a component of operating profit but not an adjustment to adjusted
operating profit. As a result of the adoption of ASU 2017-07, amortization of prior service credits are now a component of other components
of net periodic benefit costs/(income) rather than operating profit. For the twelve months ended 2017 and 2016, $(9.7) million and $(10.4)
million, respectively, of amortization of prior service credits have been reclassified out of operating profit, thereby reducing operating profit
and adjusted operating profit.
Adjustments made to the reconciliation of operating costs to adjusted operating costs
(In thousands)
Operating costs
Less:
Depreciation & amortization
Severance
Non-operating retirement costs
Multiemployer pension plan
withdrawal costs
Twelve Months
Twelve Months
2017
Previously
Reported
Adjustment
2017
Recast
2016
Previously
Reported
Adjustment
2016
Recast
$
1,488,131
$
5,147 (1) $ 1,493,278
$
1,410,910
$
8,506 (1) $ 1,419,416
61,871
23,949
11,152
—
—
(11,152) (2)
61,871
23,949
—
61,723
18,829
15,880
—
—
(15,880) (2)
61,723
18,829
—
—
6,599 (2)
6,599
—
14,001 (2)
14,001
Adjusted operating costs
$
1,391,159
$
9,700 (3) $ 1,400,859
$
1,314,478
$
10,385 (3) $ 1,324,863
(1) Recast as a result of the adoption of ASU 2017-07. See Note 2 of the Notes to the Consolidated Financial Statements for more information.
(2) As a result of the change in definition of adjusted operating costs, only multiemployer pension plan withdrawal costs, rather than all non-
operating retirement costs, are excluded from adjusted operating costs.
(3) Represents amortization of prior service credits, which historically were a component of operating costs but not an adjustment to adjusted
operating costs. As a result of the adoption of ASU 2017-07, amortization of prior service credits are now a component of other components
of net periodic benefit costs/(income) rather than operating costs. For the twelve months ended of 2017 and 2016, $(9.7) million and $(10.4)
million, respectively, of amortization of prior service credits have been reclassified out of operating costs, thereby increasing operating costs
and adjusted operating costs.
P. 42 – THE NEW YORK TIMES COMPANY
The following table reconciles other components of net periodic benefit costs/(income), excluding special items, to the comparable
non-GAAP metric, non-operating retirement costs.
(In thousands)
Pension:
Interest cost
Expected return on plan assets
Amortization and other costs
Amortization of prior service credit (1)
Non-operating pension income
Other postretirement benefits:
Interest cost
Amortization and other costs
Amortization of prior service credit (1)
Non-operating other postretirement benefits income
Other components of net periodic benefit income
Multiemployer pension plan withdrawal costs
Twelve Months of 2017
Twelve Months of 2016
$
68,582
$
(102,900)
33,369
(1,945)
(2,894)
1,881
3,621
(7,755)
(2,253)
(5,147)
6,599
74,465
(111,159)
32,458
(1,945)
(6,181)
1,979
4,105
(8,440)
(2,356)
(8,537)
14,001
5,464
Total non-operating retirement costs
$
1,452
$
(1) The total amortization of prior service credit was $(9.7) million and $(10.4) million for the twelve months ended of 2017 and 2016,
respectively.
THE NEW YORK TIMES COMPANY – P. 43
LIQUIDITY AND CAPITAL RESOURCES
Overview
The following table presents information about our financial position.
Financial Position Summary
(In thousands, except ratios)
Cash and cash equivalents
Marketable securities
Total debt and capital lease obligations
Total New York Times Company stockholders’ equity
Ratios:
December 30,
2018
December 31,
2017
2018 vs. 2017
% Change
$
241,504
$
182,911
584,859
253,630
1,040,781
550,000
250,209
897,279
32.0
6.3
1.4
16.0
Total debt and capital lease obligations to total capitalization
Current assets to current liabilities
19.6%
1.33
21.8%
1.80
Our primary sources of cash inflows from operations were revenues from subscription and advertising sales.
Subscription and advertising revenues provided about 60% and 32%, respectively, of total revenues in 2018. The
remaining cash inflows were primarily from other revenue sources such as licensing, affiliate referrals, the leasing of
floors in our headquarters building, commercial printing, NYT Live (our live events business) and retail commerce.
Our primary sources of cash outflows were for employee compensation and benefits and other operating
expenses. We believe our cash and cash equivalents, marketable securities balance and cash provided by operations,
in combination with other sources of cash, will be sufficient to meet our financing needs over the next 12 months.
We have continued to strengthen our liquidity position and our debt profile. As of December 30, 2018, we had
cash, cash equivalents and marketable securities of $826.4 million and total debt and capital lease obligations of $253.6
million. Accordingly, our cash, cash equivalents and marketable securities exceeded total debt and capital lease
obligations by $572.8 million. Included within marketable securities is $54.2 million of securities required as collateral
for letters of credit issued by the Company in connection with the leasing of floors in our headquarters building. See
Note 19 of the Notes to the Consolidated Financial Statements for more information regarding these letters of credit.
Our cash, cash equivalents and marketable securities balances increased in 2018 primarily due to cash proceeds from
operating activities and stock option exercises, and lower contributions to certain qualified pension plans, partially
offset by capital expenditures of approximately $77 million.
We have paid quarterly dividends of $0.04 per share on the Class A and Class B Common Stock since late 2013.
In February 2019, the Board of Directors approved an increase in the quarterly dividend to $0.05 per share. We
currently expect to continue to pay comparable cash dividends in the future, although changes in our dividend
program will be considered by our Board of Directors in light of our earnings, capital requirements, financial
condition and other factors considered relevant.
In March 2009, we entered into an agreement to sell and simultaneously lease back the Condo Interest in our
headquarters building. The sale price for the Condo Interest was $225.0 million less transaction costs, for net proceeds
of approximately $211 million. We have an option, exercisable in the fourth quarter of 2019, to repurchase the Condo
Interest for $250.0 million, and we have provided notice of our intent to exercise this option. We believe that
exercising this option is in the best interest of the Company given that the market value of the Condo Interest exceeds
the exercise price, and we plan to use existing cash and marketable securities for this repurchase.
During 2018, we made contributions of approximately $8 million to certain qualified pension plans funded by
cash on hand. As of December 30, 2018, the underfunded balance of our qualified pension plans was approximately
$81 million, an increase of approximately $12 million from December 31, 2017. We expect contributions made to
satisfy minimum funding requirements to total approximately $9 million in 2019.
P. 44 – THE NEW YORK TIMES COMPANY
As part of our continued effort to reduce the size and volatility of our pension obligations, in 2017, the
Company entered into arrangements with insurers to transfer certain future benefit obligations and administrative
costs for certain qualified pension plans. These transactions allowed us to reduce our overall qualified pension plan
obligations by approximately $263 million. In addition, in 2017 we made discretionary contributions totaling $120
million to certain qualified plans. See Note 10 of the Notes to the Consolidated Financial Statements for more
information.
In 2018, we received a cash distribution of $12.5 million related to the wind-down of our Madison investment.
See Note 6 of the Notes to the Consolidated Financial Statements for more information on the Company’s investment
in Madison. We expect to receive an additional cash distribution in 2019 in the range of $5 million to $8 million related
to the wind-down of our Madison investment.
In early 2015, the Board of Directors authorized up to $101.1 million of repurchases of shares of the Company’s
Class A common stock. As of December 30, 2018, repurchases under this authorization totaled $84.9 million
(excluding commissions) and $16.2 million remained under this authorization. Our Board of Directors has authorized
us to purchase shares from time to time, subject to market conditions and other factors. There is no expiration date
with respect to this authorization.
Capital Resources
Sources and Uses of Cash
Cash flows provided by/(used in) by category were as follows:
(In thousands)
Operating activities
Investing activities
Financing activities
* Represents an increase or decrease in excess of 100%.
Operating Activities
Years Ended
% Change
December 30,
2018
December 31,
2017
December 25,
2016
2018 vs.
2017
2017 vs.
2016
$
$
$
157,117
(101,095)
3,824
$
$
$
86,712
14,100
(26,019)
$
$
$
103,876
81.2
124,468
(237,024)
*
*
(16.5)
(88.7)
(89.0)
Cash from operating activities is generated by cash receipts from subscriptions, advertising sales and other
revenue. Operating cash outflows include payments for employee compensation, pension and other benefits, raw
materials, marketing expenses, interest and income taxes.
Net cash provided by operating activities increased in 2018 compared with 2017 due to lower contributions to
certain qualified pension plans, partially offset by lower cash collections from advertising receivables.
Net cash provided by operating activities decreased in 2017 compared with 2016 due to contributions totaling
approximately $128 million to certain qualified pension plans, partially offset by higher revenues and lower tax
payments.
Investing Activities
Cash from investing activities generally includes proceeds from marketable securities that have matured and
the sale of assets, investments or a business. Cash used in investing activities generally includes purchases of
marketable securities, payments for capital projects, acquisitions of new businesses and investments.
Net cash used in investing activities in 2018 was primarily related to capital expenditures of $77.5 million and
$36.5 million in net purchases of marketable securities.
Net cash provided by investing activities in 2017 was primarily related to maturities and disposals of
marketable securities of $548.5 million and proceeds from the sale of our 49% share in Malbaie of $15.6 million, offset
by purchases of marketable securities of $466.5 million and capital expenditures of $84.8 million.
Net cash provided by investing activities in 2016 was primarily due to maturities of marketable securities, offset
by purchases of marketable securities and a cash distribution of $38.0 million from the liquidation of certain
THE NEW YORK TIMES COMPANY – P. 45
investments related to our corporate-owned life insurance, consideration paid for acquisitions of $40.4 million and
payments for capital expenditures of $30.1 million.
Payments for capital expenditures were approximately $77 million, $85 million and $30 million in 2018, 2017
and 2016, respectively.
Financing Activities
Cash from financing activities generally includes borrowings under third-party financing arrangements, the
issuance of long-term debt and funds from stock option exercises. Cash used in financing activities generally includes
the repayment of amounts outstanding under third-party financing arrangements, the payment of dividends, the
payment of long-term debt and capital lease obligations and stock-based compensation tax withholding.
Net cash provided by financing activities in 2018 was primarily related to stock issuances in connection with
option exercises of $41.3 million, partially offset by dividend payments of $26.4 million and stock-based compensation
tax withholding of $10.5 million.
Net cash used in financing activities in 2017 was primarily related to dividend payments ($26.0 million).
Net cash used in financing activities in 2016 was primarily related to the repayment, at maturity, of the $189.2
million remaining principal amount under our 6.625% senior notes in December 2016, dividend payments of $25.9
million and share repurchases of $15.7 million.
See “— Third-Party Financing” below and our Consolidated Statements of Cash Flows for additional
information on our sources and uses of cash.
Restricted Cash
We were required to maintain $18.3 million of restricted cash as of December 30, 2018 and $18.0 million as of
December 31, 2017, substantially all of which is set aside to collateralize workers’ compensation obligations.
Capital Expenditures
Capital expenditures totaled approximately $57 million, $104 million and $26 million in 2018, 2017 and 2016,
respectively. The cash payments related to the capital expenditures totaled approximately $77 million, $85 million and
$30 million in 2018, 2017 and 2016, respectively. The increased expenditures for 2017 primarily related to the redesign
and consolidation of space in our headquarters building and certain improvements at our printing and distribution
facility in College Point, New York.
Third-Party Financing
As of December 30, 2018, our current indebtedness consisted of the repurchase option related to a sale-leaseback
of a portion of our New York headquarters. See Note 7 for information regarding our total debt and capital lease
obligations. See Note 9 for information regarding the fair value of our long-term debt.
P. 46 – THE NEW YORK TIMES COMPANY
Contractual Obligations
The information provided is based on management’s best estimate and assumptions of our contractual
obligations as of December 30, 2018. Actual payments in future periods may vary from those reflected in the table.
(In thousands)
Debt(1)
Capital leases(2)
Operating leases(2)
Benefit plans(3)
Total
Payment due in
Total
2019
2020-2021
2022-2023
Later Years
$
275,558
$
275,558
$
— $
— $
7,245
49,992
7,245
7,650
419,105
59,581
—
12,935
93,586
—
11,297
80,076
—
—
18,110
185,862
$
751,900
$
350,034
$
106,521
$
91,373
$
203,972
(1) Includes estimated interest payments on long-term debt. See Note 7 of the Notes to the Consolidated Financial Statements for additional
information related to our debt.
(2) See Note 19 of the Notes to the Consolidated Financial Statements for additional information related to our capital and operating leases.
(3) The Company's general funding policy with respect to qualified pension plans is to contribute amounts at least sufficient to satisfy the minimum
amount required by applicable law and regulations. Contributions for our qualified pension plans and future benefit payments for our unfunded
pension and other postretirement benefit payments have been estimated over a 10-year period; therefore, the amounts included in the “Later
Years” column only include payments for the period of 2024-2028. For our funded qualified pension plans, estimating funding depends on
several variables, including the performance of the plans' investments, assumptions for discount rates, expected long-term rates of return on
assets, rates of compensation increases (applicable only for the Guild-Times Adjustable Pension Plan that has not been frozen) and other
factors. Thus, our actual contributions could vary substantially from these estimates. While benefit payments under these plans are expected to
continue beyond 2028, we have included in this table only those benefit payments estimated over the next 10 years. Benefit plans in the table
above also include estimated payments for multiemployer pension plan withdrawal liabilities. See Notes 10 and 11 of the Notes to the
Consolidated Financial Statements for additional information related to our pension and other postretirement benefits plans.
“Other Liabilities — Other” in our Consolidated Balance Sheets include liabilities related to (1) deferred
compensation, primarily related to our deferred executive compensation plan (the “DEC”) and (2) various other
liabilities, including our contingent tax liability for uncertain tax positions. These liabilities are not included in the
table above primarily because the future payments are not determinable. See Note 12 of the Notes to the Consolidated
Financial Statements for additional information.
The DEC previously enabled certain eligible executives to elect to defer a portion of their compensation on a
pre-tax basis. The deferred amounts are invested at the executives’ option in various mutual funds. The fair value of
deferred compensation is based on the mutual fund investments elected by the executives and on quoted prices in
active markets for identical assets. The fair value of deferred compensation was $23.2 million as of December 30, 2018.
The DEC was frozen effective December 31, 2015, and no new contributions may be made into the plan. See Note 12
of the Notes to the Consolidated Financial Statements for additional information on “Other Liabilities — Other.”
Our liability for uncertain tax positions was approximately $14.8 million, including approximately $3.2 million
of accrued interest as of December 30, 2018. Until formal resolutions are reached between us and the tax authorities,
the timing and amount of a possible audit settlement for uncertain tax benefits is not practicable. Therefore, we do not
include this obligation in the table of contractual obligations. See Note 13 of the Notes to the Consolidated Financial
Statements for additional information regarding income taxes.
We have a contract through the end of 2022 with Resolute FP US Inc., a subsidiary of Resolute Forest Products
Inc., a major paper supplier, to purchase newsprint. The contract requires us to purchase annually the lesser of a fixed
number of tons or a percentage of our total newsprint requirement at market rate in an arm’s length transaction. Since
the quantities of newsprint purchased annually under this contract are based on our total newsprint requirement, the
amount of the related payments for these purchases is excluded from the table above.
Off-Balance Sheet Arrangements
We did not have any material off-balance sheet arrangements as of December 30, 2018.
THE NEW YORK TIMES COMPANY – P. 47
CRITICAL ACCOUNTING POLICIES
Our Consolidated Financial Statements are prepared in accordance with GAAP. The preparation of these
financial statements requires management to make estimates and assumptions that affect the amounts reported in the
Consolidated Financial Statements for the periods presented.
We continually evaluate the policies and estimates we use to prepare our Consolidated Financial Statements. In
general, management’s estimates are based on historical experience, information from third-party professionals and
various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results may
differ from those estimates made by management.
Our critical accounting policies include our accounting for goodwill and intangibles, retirement benefits and
income taxes. Specific risks related to our critical accounting policies are discussed below.
Goodwill and Intangibles
We evaluate whether there has been an impairment of goodwill or intangible assets not amortized on an annual
basis or in an interim period if certain circumstances indicate that a possible impairment may exist. For a description
of our related accounting policies, refer to Note 2 of the Notes to the Consolidated Financial Statements.
(In thousands)
Goodwill
Intangibles
Total assets
December 30,
2018
December 31,
2017
$
$
$
140,282
6,225
2,197,123
$
$
$
143,549
8,161
2,099,780
Percentage of goodwill and intangibles to total assets
7%
7%
The impairment analysis is considered critical because of the significance of goodwill and intangibles to our
Consolidated Balance Sheets.
We test for goodwill impairment at a reporting unit level. We first perform a qualitative assessment to
determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value.
If we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying
value, we compare the fair value of a reporting unit with its carrying amount, including goodwill. Fair value is
calculated by a combination of a discounted cash flow model and a market approach model.
The discounted cash flow analysis requires us to make various judgments, estimates and assumptions, many of
which are interdependent, about future revenues, operating margins, growth rates, capital expenditures, working
capital, discount rates and royalty rates. The starting point for the assumptions used in our discounted cash flow
analysis is the annual long-range financial forecast. The annual planning process that we undertake to prepare the
long-range financial forecast takes into consideration a multitude of factors, including historical growth rates and
operating performance, related industry trends, macroeconomic conditions, and marketplace data, among others.
Assumptions are also made for perpetual growth rates for periods beyond the long-range financial forecast period.
Our estimates of fair value are sensitive to changes in all of these variables, certain of which relate to broader
macroeconomic conditions outside our control.
The market approach analysis includes applying a multiple, based on comparable market transactions, to
certain operating metrics of a reporting unit.
The significant estimates and assumptions used by management in assessing the recoverability of goodwill and
intangibles are estimated future cash flows, discount rates, growth rates, as well as other factors. Any changes in these
estimates or assumptions could result in an impairment charge. The estimates, based on reasonable and supportable
assumptions and projections, require management’s subjective judgment. Depending on the assumptions and
estimates used, the estimated results of the impairment tests can vary within a range of outcomes.
P. 48 – THE NEW YORK TIMES COMPANY
Retirement Benefits
Our single-employer pension and other postretirement benefit costs and obligations are accounted for using
actuarial valuations. We recognize the funded status of these plans – measured as the difference between plan assets,
if funded, and the benefit obligation – on the balance sheet and recognize changes in the funded status that arise
during the period but are not recognized as components of net periodic pension cost, within other comprehensive
income/(loss), net of tax. The assets related to our funded pension plans are measured at fair value.
We also recognize the present value of liabilities associated with the withdrawal from multiemployer pension
plans.
We consider accounting for retirement plans critical to our operations because management is required to make
significant subjective judgments about a number of actuarial assumptions, which include discount rates, long-term
return on plan assets and mortality rates. These assumptions may have an effect on the amount and timing of future
contributions. Depending on the assumptions and estimates used, the impact from our pension and other
postretirement benefits could vary within a range of outcomes and could have a material effect on our Consolidated
Financial Statements.
See “— Pensions and Other Postretirement Benefits” below for more information on our retirement benefits.
Revenue Recognition
Our contracts with customers sometimes include promises to transfer multiple products and services to a
customer. Determining whether products and services are considered distinct performance obligations that should be
accounted for separately versus together may require significant judgment. We use an observable price to determine
the standalone selling price for separate performance obligations if available or, when not available, an estimate that
maximizes the use of observable inputs and faithfully depicts the selling price of the promised goods or services if we
sold those goods or services separately to a similar customer in similar circumstances.
Income Taxes
We consider accounting for income taxes critical to our operating results because management is required to
make significant subjective judgments in developing our provision for income taxes, including the determination of
deferred tax assets and liabilities, and any valuation allowances that may be required against deferred tax assets.
Income taxes are recognized for the following: (1) the amount of taxes payable for the current year and (2)
deferred tax assets and liabilities for the future tax consequences of events that have been recognized differently in the
financial statements than for tax purposes. Deferred tax assets and liabilities are established using statutory tax rates
and are adjusted for tax rate changes in the period of enactment.
We assess whether our deferred tax assets shall be reduced by a valuation allowance if it is more likely than not
that some portion or all of the deferred tax assets will not be realized. Our process includes collecting positive (i.e.,
sources of taxable income) and negative (i.e., recent historical losses) evidence and assessing, based on the evidence,
whether it is more likely than not that the deferred tax assets will not be realized.
We recognize in our financial statements the impact of a tax position if that tax position is more likely than not
of being sustained on audit, based on the technical merits of the tax position. This involves the identification of
potential uncertain tax positions, the evaluation of tax law and an assessment of whether a liability for uncertain tax
positions is necessary. Different conclusions reached in this assessment can have a material impact on the
Consolidated Financial Statements.
We operate within multiple taxing jurisdictions and are subject to audit in these jurisdictions. These audits can
involve complex issues, which could require an extended period of time to resolve. Until formal resolutions are
reached between us and the tax authorities, the timing and amount of a possible audit settlement for uncertain tax
benefits is difficult to predict.
THE NEW YORK TIMES COMPANY – P. 49
PENSIONS AND OTHER POSTRETIREMENT BENEFITS
We sponsor several frozen single-employer defined benefit pension plans. The Company and The NewsGuild
of New York jointly sponsor the Guild-Times Adjustable Pension Plan which continues to accrue active benefits.
Effective January 1, 2018, the Company became the sole sponsor of the frozen Newspaper Guild of New York - The
New York Times Pension Plan (the “Guild-Times Plan”). The Guild-Times Plan was previously joint trusteed between
the Guild and the Company. Effective December 31, 2018, the Guild-Times Plan and the Retirement Annuity Plan For
Craft Employees of The New York Times Companies were merged into The New York Times Companies Pension
Plan. Our pension liability also includes our multiemployer pension plan withdrawal obligations. Our liability for
postretirement obligations includes our liability to provide health benefits to eligible retired employees.
The table below includes the liability for all of these plans.
(In thousands)
Pension and other postretirement liabilities (includes current portion)
Total liabilities
December 30,
2018
December 31,
2017
$
$
446,860
1,154,482
$
$
476,965
1,202,417
Percentage of pension and other postretirement liabilities to total liabilities
38.7%
39.7%
Pension Benefits
Our Company-sponsored defined benefit pension plans include qualified plans (funded) as well as non-
qualified plans (unfunded). These plans provide participating employees with retirement benefits in accordance with
benefit formulas detailed in each plan. All of our non-qualified plans, which provide enhanced retirement benefits to
select employees, are frozen, except for a foreign-based pension plan discussed below.
Our joint Company and Guild-sponsored plan is a qualified plan and is included in the table below.
We also have a foreign-based pension plan for certain non-U.S. employees (the “foreign plan”). The information
for the foreign plan is combined with the information for U.S. non-qualified plans. The benefit obligation of the
foreign plan is immaterial to our total benefit obligation.
The funded status of our qualified and non-qualified pension plans as of December 30, 2018 is as follows:
(In thousands)
Pension obligation
Fair value of plan assets
December 30, 2018
Qualified
Plans
Non-Qualified
Plans
All Plans
$
1,491,398
$
223,066
$
1,714,464
1,410,151
—
1,410,151
Pension underfunded/unfunded obligation, net
$
(81,247)
$
(223,066)
$
(304,313)
We made contributions of approximately $8 million to the joint Company and Guild-sponsored plan in 2018.
We expect contributions made to satisfy minimum funding requirements to total approximately $9 million in 2019.
Pension expense is calculated using a number of actuarial assumptions, including an expected long-term rate of
return on assets (for qualified plans) and a discount rate. Our methodology in selecting these actuarial assumptions is
discussed below.
In determining the expected long-term rate of return on assets, we evaluated input from our investment
consultants, actuaries and investment management firms, including our review of asset class return expectations, as
well as long-term historical asset class returns. Projected returns by such consultants and economists are based on
broad equity and bond indices. Our objective is to select an average rate of earnings expected on existing plan assets
and expected contributions to the plan (less plan expenses to be incurred) during the year. The expected long-term
rate of return determined on this basis was 5.70% at the beginning of 2018. Our plan assets had an average rate of
return of approximately (4.66%) in 2018 and an average annual return of approximately 7.05% over the three-year
P. 50 – THE NEW YORK TIMES COMPANY
period 2016-2018. We regularly review our actual asset allocation and periodically rebalance our investments to meet
our investment strategy.
The market-related value of plan assets is multiplied by the expected long-term rate of return on assets to
compute the expected return on plan assets, a component of net periodic pension cost. The market-related value of
plan assets is a calculated value that recognizes changes in fair value over three years.
Based on the composition of our assets at the end of the year, we estimated our 2019 expected long-term rate of
return to be 5.70%. If we had decreased our expected long-term rate of return on our plan assets by 50 basis points in
2018, pension expense would have increased by approximately $7 million for our qualified pension plans. Our
funding requirements would not have been materially affected.
We determined our discount rate using a Ryan ALM, Inc. Curve (the “Ryan Curve”). The Ryan Curve provides
the bonds included in the curve and allows adjustments for certain outliers (i.e., bonds on “watch”). We believe the
Ryan Curve allows us to calculate an appropriate discount rate.
To determine our discount rate, we project a cash flow based on annual accrued benefits. For active
participants, the benefits under the respective pension plans are projected to the date of termination. The projected
plan cash flow is discounted to the measurement date, which is the last day of our fiscal year, using the annual spot
rates provided in the Ryan Curve. A single discount rate is then computed so that the present value of the benefit cash
flow equals the present value computed using the Ryan Curve rates.
The weighted-average discount rate determined on this basis was 4.43% for our qualified plans and 4.35% for
our non-qualified plans as of December 30, 2018.
If we had decreased the expected discount rate by 50 basis points for our qualified plans and our non-qualified
plans in 2018, pension expense would have increased by approximately $0.5 million and our pension obligation
would have increased by approximately $99 million as of December 30, 2018.
We will continue to evaluate all of our actuarial assumptions, generally on an annual basis, and will adjust as
necessary. Actual pension expense will depend on future investment performance, changes in future discount rates,
the level of contributions we make and various other factors.
We also recognize the present value of pension liabilities associated with the withdrawal from multiemployer
pension plans. Our multiemployer pension plan withdrawal liability was approximately $97 million as of
December 30, 2018. This liability represents the present value of the obligations related to complete and partial
withdrawals that have already occurred as well as an estimate of future partial withdrawals that we considered
probable and reasonably estimable. For those plans that have yet to provide us with a demand letter, the actual
liability will not be known until they complete a final assessment of the withdrawal liability and issue a demand to
us. Therefore, the estimate of our multiemployer pension plan liability will be adjusted as more information becomes
available that allows us to refine our estimates.
See Note 10 of the Notes to the Consolidated Financial Statements for additional information regarding our
pension plans.
Other Postretirement Benefits
We provide health benefits to retired employees (and their eligible dependents) who meet the definition of an
eligible participant and certain age and service requirements, as outlined in the plan document. While we offer pre-
age 65 retiree medical coverage to employees who meet certain retiree medical eligibility requirements, we do not
provide post-age 65 retiree medical benefits for employees who retired on or after March 1, 2009. We accrue the costs
of postretirement benefits during the employees’ active years of service and our policy is to pay our portion of
insurance premiums and claims from general corporate assets.
The annual postretirement expense was calculated using a number of actuarial assumptions, including a health-
care cost trend rate and a discount rate. The health-care cost trend rate was 6.90% as of December 30, 2018. A one-
percentage point change in the assumed health-care cost trend rate would result in an increase of less than $0.1
million or a decrease of less than $0.1 million in our 2018 service and interest costs, respectively, two factors included
in the calculation of postretirement expense. A one-percentage point change in the assumed health-care cost trend rate
would result in an increase of approximately $1 million or a decrease of approximately $1 million in our accumulated
benefit obligation as of December 30, 2018.
THE NEW YORK TIMES COMPANY – P. 51
See Note 11 of the Notes to the Consolidated Financial Statements for additional information regarding our
other postretirement benefits.
RECENT ACCOUNTING PRONOUNCEMENTS
See Note 2 of the Notes to the Consolidated Financial Statements for information regarding recent accounting
pronouncements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our market risk is principally associated with the following:
• Our exposure to changes in interest rates relates primarily to interest earned and market value on our cash
and cash equivalents, and marketable securities. Our cash and cash equivalents and marketable securities
consist of cash, money market funds, certificates of deposit, U.S. Treasury securities, U.S. government agency
securities, commercial paper, and corporate debt securities. Our investment policy and strategy are focused
on preservation of capital and supporting our liquidity requirements. Changes in U.S. interest rates affect the
interest earned on our cash and cash equivalents and marketable securities, and the market value of those
securities. A hypothetical 100 basis point increase in interest rates would have resulted in a decrease of
approximately $4 million in the market value of our marketable debt securities as of December 30, 2018, and
December 31, 2017. Any realized gains or losses resulting from such interest rate changes would only occur if
we sold the investments prior to maturity.
• Newsprint is a commodity subject to supply and demand market conditions. The cost of raw materials, of
which newsprint expense is a major component, represented approximately 5% and 4% of our total operating
costs in 2018 and 2017, respectively. Based on the number of newsprint tons consumed in 2018 and 2017, a $10
per ton increase in newsprint prices would have resulted in additional newsprint expense of $0.9 million (pre-
tax) in 2018 and 2017.
• The discount rate used to measure the benefit obligations for our qualified pension plans is determined by
using the Ryan Curve, which provides rates for the bonds included in the curve and allows adjustments for
certain outliers (i.e., bonds on “watch”). Broad equity and bond indices are used in the determination of the
expected long-term rate of return on pension plan assets. Therefore, interest rate fluctuations and volatility of
the debt and equity markets can have a significant impact on asset values, the funded status of our pension
plans and future anticipated contributions. See “Item 7 — Management’s Discussion and Analysis of
Financial Condition and Results of Operations — Pensions and Other Postretirement Benefits.”
• A significant portion of our employees are unionized and our results could be adversely affected if future
labor negotiations or contracts were to further restrict our ability to maximize the efficiency of our operations,
or if a larger percentage of our workforce were to be unionized. In addition, if we are unable to negotiate
labor contracts on reasonable terms, or if we were to experience labor unrest or other business interruptions
in connection with labor negotiations or otherwise, our ability to produce and deliver our products could be
impaired.
See Notes 4, 10, 11 and 19 of the Notes to the Consolidated Financial Statements.
P. 52 – THE NEW YORK TIMES COMPANY
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
THE NEW YORK TIMES COMPANY 2018 FINANCIAL REPORT
INDEX
PAGE
Management’s Responsibility for the Financial Statements
Management’s Report on Internal Control Over Financial Reporting
Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial
Reporting
Consolidated Balance Sheets as of December 30, 2018 and December 31, 2017
Consolidated Statements of Operations for the years ended December 30, 2018, December 31, 2017 and
December 25, 2016
Consolidated Statements of Comprehensive Income/(Loss) for the years ended December 30, 2018,
December 31, 2017 and December 25, 2016
Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 30, 2018,
December 31, 2017 and December 25, 2016
Consolidated Statements of Cash Flows for the years ended December 30, 2018, December 31, 2017
and December 25, 2016
Notes to the Consolidated Financial Statements
1. Basis of Presentation
2. Summary of Significant Accounting Policies
3. Revenue
4. Marketable Securities
5. Goodwill and Intangibles
6. Investments
7. Debt Obligations
8. Other
9. Fair Value Measurements
10. Pension Benefits
11. Other Postretirement Benefits
12. Other Liabilities
13. Income Taxes
14. Discontinued Operations
15. Earnings/(Loss) Per Share
16. Stock-Based Awards
17. Stockholders’ Equity
18. Segment Information
19. Commitments and Contingent Liabilities
20. Subsequent Events
Schedule II – Valuation and Qualifying Accounts for the three years ended December 30, 2018
Quarterly Information (Unaudited)
54
54
55
56
58
60
62
63
64
66
66
66
77
79
81
81
84
85
87
88
98
102
102
105
105
106
109
110
110
112
113
114
THE NEW YORK TIMES COMPANY – P. 53
REPORT OF MANAGEMENT
Management’s Responsibility for the Financial Statements
The Company’s consolidated financial statements were prepared by management, who is responsible for their
integrity and objectivity. The consolidated financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America (“GAAP”) and, as such, include amounts based on
management’s best estimates and judgments.
Management is further responsible for establishing and maintaining adequate internal control over financial
reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. The Company’s
internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. The
Company follows and continuously monitors its policies and procedures for internal control over financial reporting
to ensure that this objective is met (see “Management’s Report on Internal Control Over Financial Reporting” below).
The consolidated financial statements were audited by Ernst & Young LLP, an independent registered public
accounting firm, in 2018, 2017 and 2016. Its audits were conducted in accordance with the standards of the Public
Company Accounting Oversight Board (United States) and its report is shown on Page 55.
The Audit Committee of the Board of Directors, which is composed solely of independent directors, meets
regularly with the independent registered public accounting firm, internal auditors and management to discuss
specific accounting, financial reporting and internal control matters. Both the independent registered public
accounting firm and the internal auditors have full and free access to the Audit Committee. Each year the Audit
Committee selects, subject to ratification by stockholders, the firm which is to perform audit and other related work
for the Company.
Management’s Report on Internal Control Over Financial Reporting
Management of the Company is responsible for establishing and maintaining adequate internal control over
financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. The
Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with GAAP. The Company’s internal control over financial reporting includes those policies and procedures that:
• pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions
and dispositions of the assets of the Company;
• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with GAAP, and that receipts and expenditures of the Company are being made
only in accordance with authorizations of management and directors of the Company; and
• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of the Company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies
or procedures may deteriorate.
Our management, with the participation of our principal executive officer and principal financial officer,
assessed the effectiveness of the Company’s internal control over financial reporting as of December 30, 2018. In
making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission in Internal Control — Integrated Framework (2013 framework). Based on its assessment,
management concluded that the Company’s internal control over financial reporting was effective as of December 30,
2018.
The Company’s independent registered public accounting firm, Ernst & Young LLP, that audited the
consolidated financial statements of the Company included in this Annual Report on Form 10-K, has issued an
attestation report on the Company’s internal control over financial reporting as of December 30, 2018, which is
included on Page 56 in this Annual Report on Form 10-K.
P. 54 – THE NEW YORK TIMES COMPANY
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of The New York Times Company
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of The New York Times Company as of
December 30, 2018 and December 31, 2017, and the related consolidated statements of operations, comprehensive
income/(loss), changes in stockholders’ equity, and cash flows for each of the three fiscal years in the period ended
December 30, 2018, and the related notes and the financial statement schedule listed at Item 15(A)(2) of The New York
Times Company’s 2018 Annual Report on Form 10-K (collectively referred to as the “consolidated financial
statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the
consolidated financial position of The New York Times Company at December 30, 2018 and December 31, 2017, and
the consolidated results of its operations and its cash flows for each of the three fiscal years in the period ended
December 30, 2018, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), The New York Times Company's internal control over financial reporting as of
December 30, 2018, based on criteria established in Internal Control-Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 26, 2019
expressed an unqualified opinion thereon.
Adoption of ASU No. 2017-07
As discussed in Note 2 to the consolidated financial statements, The New York Times Company changed its
classification of net periodic pension cost and net periodic postretirement benefit cost in the consolidated statement of
operations in all fiscal years presented due to the adoption of ASU No. 2017-07, Compensation - Retirement Benefits
(Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.
Basis for Opinion
These financial statements are the responsibility of The New York Times Company's management. Our
responsibility is to express an opinion on The New York Times Company’s financial statements based on our audits.
We are a public accounting firm registered with the PCAOB and are required to be independent with respect to The
New York Times Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that our audits provide a reasonable basis for our opinion.
/s/ Ernst & Young LLP
We have served as The New York Times Company’s auditor since 2007.
New York, New York
February 26, 2019
THE NEW YORK TIMES COMPANY – P. 55
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of The New York Times Company
Opinion on Internal Control over Financial Reporting
We have audited The New York Times Company’s internal control over financial reporting as of December 30,
2018, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, The New York
Times Company maintained, in all material respects, effective internal control over financial reporting as of
December 30, 2018, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the accompanying consolidated balance sheets of The New York Times Company as of
December 30, 2018 and December 31, 2017, and the related consolidated statements of operations, comprehensive
income/(loss), changes in stockholders’ equity, and cash flows for each of the three fiscal years in the period ended
December 30, 2018, and the related notes and the financial statement schedule listed at Item 15(A)(2) and our report
dated February 26, 2019 expressed an unqualified opinion thereon.
Basis for Opinion
The New York Times Company’s management is responsible for maintaining effective internal control over
financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in
the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to
express an opinion on The New York Times Company’s internal control over financial reporting based on our audit.
We are a public accounting firm registered with the PCAOB and are required to be independent with respect to The
New York Times Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial
reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk
that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based
on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that
could have a material effect on the financial statements.
P. 56 – THE NEW YORK TIMES COMPANY
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies
or procedures may deteriorate.
/s/ Ernst & Young LLP
New York, New York
February 26, 2019
THE NEW YORK TIMES COMPANY – P. 57
CONSOLIDATED BALANCE SHEETS
(In thousands)
Assets
Current assets
Cash and cash equivalents
Short-term marketable securities
Accounts receivable (net of allowances of $13,249 in 2018 and $14,542 in 2017)
Prepaid expenses
Other current assets
Total current assets
Long-term marketable securities
Property, plant and equipment:
Equipment
Buildings, building equipment and improvements
Software
Land
Assets in progress
Total, at cost
Less: accumulated depreciation and amortization
Property, plant and equipment, net
Goodwill
Deferred income taxes
Miscellaneous assets
Total assets
See Notes to the Consolidated Financial Statements.
December 30,
2018
December 31,
2017
$
241,504
$
182,911
371,301
222,464
25,349
33,328
893,946
213,558
484,931
712,439
225,846
105,710
21,765
308,589
184,885
22,851
50,463
749,699
241,411
528,111
674,056
232,791
105,710
45,672
1,550,691
1,586,340
(911,845)
(945,401)
638,846
140,282
128,431
182,060
640,939
143,549
153,046
171,136
$
2,197,123
$
2,099,780
P. 58 – THE NEW YORK TIMES COMPANY
CONSOLIDATED BALANCE SHEETS — continued
(In thousands, except share and per share data)
Liabilities and stockholders’ equity
Current liabilities
Accounts payable
Accrued payroll and other related liabilities
Unexpired subscriptions revenue
Short-term debt and capital lease obligations
Accrued expenses and other
Total current liabilities
Other liabilities
Long-term debt and capital lease obligations
Pension benefits obligation
Postretirement benefits obligation
Other
Total other liabilities
Stockholders’ equity
Common stock of $.10 par value:
December 30,
2018
December 31,
2017
$
111,553
$
125,479
104,543
104,614
84,044
253,630
119,534
673,304
—
362,940
40,391
77,847
75,054
—
110,510
415,657
250,209
405,422
48,816
82,313
481,178
786,760
Class A – authorized: 300,000,000 shares; issued: 2018 – 173,158,414; 2017 – 170,276,449 (including
treasury shares: 2018 – 8,870,801; 2017 – 8,870,801)
17,316
17,028
Class B – convertible – authorized and issued shares: 2018 – 803,408; 2017 – 803,763 (including
treasury shares: 2018 – none; 2017 – none)
Additional paid-in capital
Retained earnings
Common stock held in treasury, at cost
Accumulated other comprehensive loss, net of income taxes:
Foreign currency translation adjustments
Funded status of benefit plans
Unrealized loss on available-for-sale securities
Total accumulated other comprehensive loss, net of income taxes
Total New York Times Company stockholders’ equity
Noncontrolling interest
Total stockholders’ equity
80
80
206,316
164,275
1,506,004
1,310,136
(171,211)
(171,211)
4,677
6,328
(520,308)
(427,819)
(2,093)
(1,538)
(517,724)
(423,029)
1,040,781
897,279
1,860
84
1,042,641
897,363
Total liabilities and stockholders’ equity
$
2,197,123
$
2,099,780
See Notes to the Consolidated Financial Statements.
THE NEW YORK TIMES COMPANY – P. 59
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
Revenues
Subscription
Advertising
Other
Total revenues
Operating costs
Production costs:
Wages and benefits
Raw materials
Other production costs
Total production costs
Selling, general and administrative costs
Depreciation and amortization
Total operating costs
Headquarters redesign and consolidation
Restructuring charge
Multiemployer pension and other contractual (gain)/loss
Operating profit
Other components of net periodic benefit costs
Gain/(loss) from joint ventures
Interest expense and other, net
Income from continuing operations before income taxes
Income tax expense
Income from continuing operations
Loss from discontinued operations, net of income taxes
Net income
Net (income)/loss attributable to the noncontrolling interest
Net income attributable to The New York Times Company common stockholders
Amounts attributable to The New York Times Company common stockholders:
Income from continuing operations
Loss from discontinued operations, net of income taxes
Net income
See Notes to the Consolidated Financial Statements.
P. 60 – THE NEW YORK TIMES COMPANY
Years Ended
December 30,
2018
December 31,
2017
December 25,
2016
(52 weeks)
(53 weeks)
(52 weeks)
$
1,042,571
$
1,008,431
$
880,543
558,253
147,774
558,513
108,695
580,732
94,067
1,748,598
1,675,639
1,555,342
380,678
76,542
196,956
654,176
845,591
59,011
363,686
66,304
186,352
616,342
815,065
61,871
364,302
72,325
192,728
629,355
728,338
61,723
1,558,778
1,493,278
1,419,416
4,504
—
10,090
—
(4,851)
(4,320)
190,167
176,591
8,274
10,764
16,566
176,091
48,631
127,460
—
127,460
(1,776)
64,225
18,641
19,783
111,224
103,956
7,268
(431)
6,837
(2,541)
—
16,518
6,730
112,678
11,074
(36,273)
34,805
30,526
4,421
26,105
(2,273)
23,832
5,236
$
$
$
125,684
$
4,296
$
29,068
125,684
$
4,727
$
31,341
—
(431)
(2,273)
125,684
$
4,296
$
29,068
CONSOLIDATED STATEMENTS OF OPERATIONS — continued
(In thousands, except per share data)
Average number of common shares outstanding:
Basic
Diluted
Basic earnings per share attributable to The New York Times Company common
stockholders:
Income from continuing operations
Loss from discontinued operations, net of income taxes
Net income
Diluted earnings per share attributable to The New York Times Company common
stockholders:
Income from continuing operations
Loss from discontinued operations, net of income taxes
Net income
Dividends declared per share
See Notes to the Consolidated Financial Statements.
Years Ended
December 30,
2018
December 31,
2017
December 25,
2016
(52 weeks)
(53 weeks)
(52 weeks)
164,845
166,939
161,926
164,263
161,128
162,817
$
$
$
$
$
0.76
$
0.03
$
—
—
0.76
$
0.03
$
0.75
$
0.03
$
—
0.75
0.16
$
$
—
0.03
0.16
$
$
0.19
(0.01)
0.18
0.19
(0.01)
0.18
0.16
THE NEW YORK TIMES COMPANY – P. 61
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
(In thousands)
Net income
Other comprehensive income/(loss), before tax:
Foreign currency translation adjustments-income/(loss)
Pension and postretirement benefits obligation
Net unrealized loss on available-for-sale securities
Other comprehensive income, before tax
Income tax expense
Other comprehensive (loss)/income, net of tax
Comprehensive income
Years Ended
December 30,
2018
December 31,
2017
December 25,
2016
(52 weeks)
(53 weeks)
(52 weeks)
$
127,460
$
6,837
$
23,832
(4,368)
3,910
(300)
(758)
(198)
(560)
126,900
12,110
89,881
(2,545)
99,446
41,545
57,901
64,738
(3,070)
51,405
—
48,335
19,096
29,239
53,071
5,275
Comprehensive (income)/loss attributable to the noncontrolling interest
(1,776)
(3,655)
Comprehensive income attributable to The New York Times Company common
stockholders
$
125,124
$
61,083
$
58,346
See Notes to the Consolidated Financial Statements.
P. 62 – THE NEW YORK TIMES COMPANY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(In thousands,
except share and
per share data)
Capital
Stock
Class A
and
Class B
Common
Additional
Paid-in
Capital
Retained
Earnings
Common
Stock
Held in
Treasury,
at Cost
Accumulated
Other
Comprehensive
Loss, Net of
Income
Taxes
Total
New York
Times
Company
Stockholders’
Equity
Non-
controlling
Interest
Total
Stock-
holders’
Equity
Balance, December 27, 2015
$ 16,908 $ 146,348 $1,328,744 $ (156,155) $
(509,094) $
826,751 $
1,704 $ 828,455
Net income/(loss)
Dividends
Other comprehensive income/
(loss)
Issuance of shares:
Stock options – 114,652
Class A shares
Restricted stock units vested –
304,171 Class A shares
Performance-based awards –
524,520 Class A shares
Share repurchases - 1,179,672
Class A shares
Stock-based compensation
Income tax shortfall related to
share-based payments
—
—
—
12
30
53
—
—
—
—
—
—
750
(2,769)
(6,941)
—
12,622
(82)
29,068
(25,901)
—
—
—
—
—
—
—
—
—
—
—
—
—
(15,056)
—
—
—
—
29,068
(5,236)
23,832
(25,901)
—
(25,901)
29,278
29,278
(39)
29,239
—
—
—
—
—
—
762
(2,739)
(6,888)
(15,056)
12,622
(82)
—
—
—
—
—
—
762
(2,739)
(6,888)
(15,056)
12,622
(82)
Balance, December 25, 2016
17,003
149,928
1,331,911
(171,211)
(479,816)
847,815
(3,571)
844,244
Balance, December 31, 2017
17,108
164,275
1,310,136
(171,211)
(423,029)
897,279
Net income
Dividends
Other comprehensive income
Issuance of shares:
Stock options – 657,704
Class A shares
Restricted stock units vested –
283,116 Class A shares
Performance-based awards –
115,881 Class A shares
Stock-based compensation
—
—
—
66
28
11
—
—
—
—
4,535
(2,743)
(1,360)
13,915
4,296
(26,071)
—
—
—
—
—
—
—
—
—
—
—
—
Impact of adopting new
accounting guidance
Net income
Dividends
Other comprehensive loss
Issuance of shares:
Stock options – 2,327,046
Class A shares
Restricted stock units vested –
282,723 Class A shares
Performance-based awards –
271,841 Class A shares
Stock-based compensation
—
—
—
—
—
—
—
—
233
41,055
28
27
—
(4,619)
(5,930)
11,535
96,707
125,684
(26,523)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
56,787
4,296
2,541
6,837
(26,071)
56,787
—
(26,071)
1,114
57,901
—
—
—
—
4,601
(2,715)
(1,349)
13,915
—
—
—
—
84
—
4,601
(2,715)
(1,349)
13,915
897,363
2,572
(94,135)
2,572
—
—
(560)
—
—
—
—
125,684
1,776
127,460
(26,523)
(560)
41,288
(4,591)
(5,903)
11,535
—
—
—
—
—
—
(26,523)
(560)
41,288
(4,591)
(5,903)
11,535
Balance, December 30, 2018
$ 17,396 $ 206,316 $1,506,004 $ (171,211) $
(517,724) $
1,040,781 $
1,860 $1,042,641
See Notes to the Consolidated Financial Statements.
THE NEW YORK TIMES COMPANY – P. 63
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Cash flows from operating activities
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Years Ended
December 30,
2018
December 31,
2017
December 25,
2016
$
127,460
$
6,837
$
23,832
Restructuring charge
Pension settlement expense
Multiemployer pension plan charges
Depreciation and amortization
Stock-based compensation expense
(Gain)/loss from joint ventures
Deferred income taxes
Long-term retirement benefit obligations
Other – net
Changes in operating assets and liabilities:
Accounts receivable – net
Other current assets
Accounts payable, accrued payroll and other liabilities
Unexpired subscriptions
Net cash provided by operating activities
Cash flows from investing activities
Purchases of marketable securities
Maturities/disposals of marketable securities
Cash distribution from corporate-owned life insurance
Business acquisitions
Proceeds/(purchases) of investments
Capital expenditures
Other - net
Net cash (used) in/provided by investing activities
Cash flows from financing activities
Long-term obligations:
Repayment of debt and capital lease obligations
Dividends paid
Capital shares:
Stock issuances
Repurchases
Windfall tax benefit related to stock-based payments
Share-based compensation tax withholding
Net cash provided by/(used) in financing activities
Net increase/(decrease) in cash, cash equivalents and restricted cash
Effect of exchange rate changes on cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at the beginning of the year
—
—
—
59,011
12,959
(10,764)
4,047
(46,877)
1,139
(37,579)
18,241
20,490
8,990
157,117
(470,493)
434,012
—
—
12,447
(77,487)
426
(101,095)
(552)
(26,418)
41,288
—
—
(10,494)
3,824
59,846
(983)
200,936
—
102,109
—
61,871
14,809
(18,641)
105,174
(184,418)
(1,352)
12,470
(30,527)
10,012
8,368
86,712
(466,522)
548,461
—
—
15,591
(84,753)
1,323
14,100
(552)
(26,004)
4,601
—
—
(4,064)
(26,019)
74,793
593
125,550
Cash, cash equivalents and restricted cash at the end of the year
$
259,799
$
200,936
$
See Notes to the Consolidated Financial Statements.
16,518
21,294
11,701
61,723
12,430
36,273
(13,128)
(56,942)
4,525
9,825
1,599
(32,276)
6,502
103,876
(566,846)
725,365
38,000
(40,410)
(1,955)
(30,095)
409
124,468
(189,768)
(25,897)
761
(15,684)
3,193
(9,629)
(237,024)
(8,680)
(237)
134,467
125,550
P. 64 – THE NEW YORK TIMES COMPANY
SUPPLEMENTAL DISCLOSURES TO CONSOLIDATED STATEMENTS OF CASH FLOWS
Cash Flow Information
(In thousands)
Cash payments
Interest, net of capitalized interest
Income tax (refunds)/payments – net
See Notes to the Consolidated Financial Statements.
Years Ended
December 30,
2018
December 31,
2017
December 25,
2016
$
$
28,133
(1,070)
$
$
27,732
21,552
$
$
39,487
44,896
THE NEW YORK TIMES COMPANY – P. 65
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
Nature of Operations
The New York Times Company is a global media organization that includes newspapers, print and digital
products and related businesses. The New York Times Company and its consolidated subsidiaries are referred to
collectively as the “Company,” “we,” “our” and “us.” Our major sources of revenue are subscriptions and
advertising.
Principles of Consolidation
The accompanying Consolidated Financial Statements have been prepared in accordance with generally
accepted accounting principles in the United States of America (“GAAP”) and include the accounts of our Company
and our wholly and majority-owned subsidiaries after elimination of all significant intercompany transactions.
The portion of the net income or loss and equity of a subsidiary attributable to the owners of a subsidiary other
than the Company (a noncontrolling interest) is included as a component of consolidated stockholders‘ equity in our
Consolidated Balance Sheets, within net income or loss in our Consolidated Statements of Operations, within
comprehensive income or loss in our Consolidated Statements of Comprehensive Income/(Loss) and as a component
of consolidated stockholders’ equity in our Consolidated Statements of Changes in Stockholders’ Equity.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect the amounts reported in our Consolidated Financial Statements. Actual results could differ
from these estimates.
Fiscal Year
Our fiscal year end is the last Sunday in December. Fiscal years 2018 and 2016 each comprised 52 weeks and
fiscal year 2017 comprised 53 weeks. Our fiscal years ended as of December 30, 2018, December 31, 2017, and
December 25, 2016, respectively.
2. Summary of Significant Accounting Policies
Cash and Cash Equivalents
We consider all highly liquid debt instruments with original maturities of three months or less to be cash
equivalents.
Marketable Securities
We have investments in marketable debt securities. We determine the appropriate classification of our
investments at the date of purchase and reevaluate the classifications at the balance sheet date. Marketable debt
securities with maturities of 12 months or less are classified as short-term. Marketable debt securities with maturities
greater than 12 months are classified as long-term. The Company’s marketable securities are accounted for as
available for sale (“AFS”).
AFS securities are reported at fair value. Unrealized gains and losses, after applicable income taxes, are reported
in accumulated other comprehensive income/(loss).
We conduct an other-than-temporary impairment (“OTTI”) analysis on a quarterly basis or more often if a
potential loss-triggering event occurs. We consider factors such as the duration, severity and the reason for the decline
in value, the potential recovery period and whether we intend to sell. For AFS securities, we also consider whether
(i) it is more likely than not that we will be required to sell the debt securities before recovery of their amortized cost
basis and (ii) the amortized cost basis cannot be recovered as a result of credit losses.
P. 66 – THE NEW YORK TIMES COMPANY
Concentration of Risk
Financial instruments, which potentially subject us to concentration of risk, are cash and cash equivalents and
marketable securities. Cash is placed with major financial institutions. As of December 30, 2018, we had cash balances
at financial institutions in excess of federal insurance limits. We periodically evaluate the credit standing of these
financial institutions as part of our ongoing investment strategy.
Our marketable securities portfolio consists of investment-grade securities diversified among security types,
issuers and industries. Our cash equivalents and marketable securities are primarily managed by third-party
investment managers who are required to adhere to investment policies approved by our Board of Directors designed
to mitigate risk. Included within marketable securities is approximately $54 million of securities used as collateral for
letters of credit issued by the Company in connection with the leasing of floors in our headquarters building.
Accounts Receivable
Credit is extended to our advertisers and our subscribers based upon an evaluation of the customer’s financial
condition, and collateral is not required from such customers. Allowances for estimated credit losses, rebates, returns,
rate adjustments and discounts are generally established based on historical experience.
Inventories
Inventories are included within Other current assets of the Consolidated Balance Sheets. Inventories are stated
at the lower of cost or net realizable value. Inventory cost is generally based on the last-in, first-out (“LIFO”) method
for newsprint and other paper grades and the first-in, first-out (“FIFO”) method for other inventories.
Investments
Investments in which we have at least a 20%, but not more than a 50%, interest are generally accounted for
under the equity method. We elected the fair value measurement alternative for our investment interests below 20%
and account for these investments at cost less impairments, adjusted by observable price changes in orderly
transactions for the identical or similar investments of the same issuer given our equity instruments are without
readily determinable fair values. Prior to 2018 and the adoption of ASU 2016-01 (see Note 6 for more information),
investment interests below 20% were generally accounted for under the cost method, except if we could exercise
significant influence, the investment would be accounted for under the equity method.
We evaluate whether there has been an impairment of our investments annually or in an interim period if
circumstances indicate that a possible impairment may exist.
Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation is computed by the straight-line method over the
shorter of estimated asset service lives or lease terms as follows: buildings, building equipment and improvements –
10 to 40 years; equipment – 3 to 30 years; and software – 2 to 5 years. We capitalize interest costs and certain staffing
costs as part of the cost of major projects.
We evaluate whether there has been an impairment of long-lived assets, primarily property, plant and
equipment, if certain circumstances indicate that a possible impairment may exist. These assets are tested for
impairment at the asset group level associated with the lowest level of cash flows. An impairment exists if the
carrying value of the asset (i) is not recoverable (the carrying value of the asset is greater than the sum of
undiscounted cash flows) and (ii) is greater than its fair value.
Goodwill and Intangibles
Goodwill is the excess of cost over the fair value of tangible and intangible net assets acquired. Goodwill is not
amortized but tested for impairment annually or in an interim period if certain circumstances indicate a possible
impairment may exist. Our annual impairment testing date is the first day of our fiscal fourth quarter.
We identify a business as an operating segment if: (1) it engages in business activities from which it may earn
revenues and incur expenses; (2) its operating results are regularly reviewed by the Chief Operating Decision Maker
(who is the Company’s President and Chief Executive Officer) to make decisions about resources to be allocated to the
segment and assess its performance; and (3) it has available discrete financial information. We have determined that
we have one reportable segment. Therefore, all required segment information can be found in the Consolidated
Financial Statements.
THE NEW YORK TIMES COMPANY – P. 67
We test goodwill for impairment at a reporting unit level. During the fourth quarter of 2018, we adopted
accounting guidance that simplifies our goodwill impairment testing by eliminating the requirement to calculate the
implied fair value of goodwill (formerly “Step 2”) in the event that an impairment is identified.
We first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a
reporting unit is less than its carrying value. The qualitative assessment includes, but is not limited to, the results of
our most recent quantitative impairment test, consideration of industry, market and macroeconomic conditions, cost
factors, cash flows, changes in key management personnel and our share price. The result of this assessment
determines whether it is necessary to perform the goodwill impairment test (formerly “Step 1”). For the 2018 annual
impairment testing, based on our qualitative assessment, we concluded that goodwill is not impaired.
If we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying
value, we compare the fair value of a reporting unit with its carrying amount, including goodwill. Fair value is
calculated by a combination of a discounted cash flow model and a market approach model. In calculating fair value
for a reporting unit, we generally weigh the results of the discounted cash flow model more heavily than the market
approach because the discounted cash flow model is specific to our business and long-term projections. If the fair
value of a reporting unit exceeds its carrying amount, goodwill of that reporting unit is not considered impaired. If
the carrying amount of a reporting unit exceeds its fair value, an impairment loss would be recognized in an amount
equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.
Intangible assets that are not amortized (i.e., trade names) are tested for impairment at the asset level by
comparing the fair value of the asset with its carrying amount. If the fair value, which is based on future cash flows,
exceeds the carrying value, the asset is not considered impaired. If the carrying amount exceeds the fair value, an
impairment loss would be recognized in an amount equal to the excess of the carrying amount of the asset over the
fair value of the asset.
Intangible assets that are amortized (i.e., customer lists, non-competes, etc.) are tested for impairment at the
asset level associated with the lowest level of cash flows. An impairment exists if the carrying value of the asset (1) is
not recoverable (the carrying value of the asset is greater than the sum of undiscounted cash flows) and (2) is greater
than its fair value.
The discounted cash flow analysis requires us to make various judgments, estimates and assumptions, many of
which are interdependent, about future revenues, operating margins, growth rates, capital expenditures, working
capital, discount rates and royalty rates. The starting point for the assumptions used in our discounted cash flow
analysis is the annual long-range financial forecast. The annual planning process that we undertake to prepare the
long-range financial forecast takes into consideration a multitude of factors, including historical growth rates and
operating performance, related industry trends, macroeconomic conditions, and marketplace data, among others.
Assumptions are also made for perpetual growth rates for periods beyond the long-range financial forecast period.
Our estimates of fair value are sensitive to changes in all of these variables, certain of which relate to broader
macroeconomic conditions outside our control.
The market approach analysis includes applying a multiple, based on comparable market transactions, to
certain operating metrics of a reporting unit.
The significant estimates and assumptions used by management in assessing the recoverability of goodwill
acquired and intangibles are estimated future cash flows, discount rates, growth rates, as well as other factors. Any
changes in these estimates or assumptions could result in an impairment charge. The estimates, based on reasonable
and supportable assumptions and projections, require management’s subjective judgment. Depending on the
assumptions and estimates used, the estimated results of the impairment tests can vary within a range of outcomes.
In addition to annual testing, management uses certain indicators to evaluate whether the carrying value of a
reporting unit or intangibles may not be recoverable and an interim impairment test may be required. These
indicators include: (1) current-period operating or cash flow declines combined with a history of operating or cash
flow declines or a projection/forecast that demonstrates continuing declines in the cash flow or the inability to
improve our operations to forecasted levels, (2) a significant adverse change in the business climate, whether
structural or technological, (3) significant impairments and (4) a decline in our stock price and market capitalization.
Management has applied what it believes to be the most appropriate valuation methodology for its impairment
testing. See Note 5.
P. 68 – THE NEW YORK TIMES COMPANY
Self-Insurance
We self-insure for workers’ compensation costs, automobile and general liability claims, up to certain
deductible limits, as well as for certain employee medical and disability benefits. Employee medical costs above a
certain threshold are insured by a third party. The recorded liabilities for self-insured risks are primarily calculated
using actuarial methods. The liabilities include amounts for actual claims, claim growth and claims incurred but not
yet reported. The recorded liabilities for self-insured risks were approximately $35 million and $38 million as of
December 30, 2018 and December 31, 2017, respectively.
Pension and Other Postretirement Benefits
Our single-employer pension and other postretirement benefit costs are accounted for using actuarial
valuations. We recognize the funded status of these plans – measured as the difference between plan assets, if funded,
and the benefit obligation – on the balance sheet and recognize changes in the funded status that arise during the
period but are not recognized as components of net periodic pension cost, within other comprehensive income/(loss),
net of income taxes. The assets related to our funded pension plans are measured at fair value.
We make significant subjective judgments about a number of actuarial assumptions, which include discount
rates, health-care cost trend rates, long-term return on plan assets and mortality rates. Depending on the assumptions
and estimates used, the impact from our pension and other postretirement benefits could vary within a range of
outcomes and could have a material effect on our Consolidated Financial Statements.
We have elected the practical expedient to use the month-end that is closest to our fiscal year-end for measuring
the single-employer pension plan assets and obligations as well as other postretirement benefit plan assets and
obligations.
We also recognize the present value of pension liabilities associated with the withdrawal from multiemployer
pension plans. We record liabilities for obligations related to complete, partial and estimated withdrawals from
multiemployer pension plans. The actual liability for estimated withdrawals is not known until each plan completes a
final assessment of the withdrawal liability and issues a demand to us. Therefore, we adjust the estimate of our
multiemployer pension plan liability as more information becomes available that allows us to refine our estimates.
See Notes 10 and 11 for additional information regarding pension and other postretirement benefits.
Revenue Recognition
We generate revenues principally from subscriptions and advertising. Subscription revenues consist of revenues
from subscriptions to our print and digital products (which include our news product, as well as our Crossword and
Cooking products) and single-copy and bulk sales of our print products. Subscription revenues are based on both the
number of copies of the printed newspaper sold and digital-only subscriptions, and the rates charged to the
respective customers.
Advertising revenues are derived from the sale of our advertising products and services, primarily on our print
and digital platforms. These revenues are primarily determined by the volume, rate and mix of advertisements.
Other revenues primarily consist of revenues from licensing, affiliate referrals (revenue generated by offering
direct links to merchants in exchange for a portion of the sale price), building rental revenue, commercial printing,
NYT Live (our live events business) and retail commerce.
Revenue is recognized when a performance obligation is satisfied by transferring a promised good or service to
a customer. A good or service is considered transferred when the customer obtains control, which is when the
customer has the ability to direct the use of and/or obtain substantially all of the benefits of an asset.
Proceeds from subscription revenues are deferred at the time of sale and are recognized on a pro rata basis over
the terms of the subscriptions. Payment is typically due upfront and the revenue is recognized ratably over the
subscription period. The deferred proceeds are recorded within “Unexpired subscription revenue” in the
Consolidated Balance Sheet. Single-copy revenue is recognized based on date of publication, net of provisions for
related returns. Payment for single-copy sales is typically due upon complete satisfaction of our performance
obligations. The Company does not have significant financing components or significant payment terms as we only
offer industry standard payment terms to our customers.
THE NEW YORK TIMES COMPANY – P. 69
When our subscriptions are sold through third parties, we are a principal in the transaction and, therefore,
revenues and related costs to third parties for these sales are reported on a gross basis. We are considered a principal if
we control a promised good or service before transferring that good or service to the customer. The Company
considers several factors to determine if it controls the good and therefore is the principal. These factors include: (1) if
we have primary responsibility for fulfilling the promise, (2) if we have inventory risk before the goods or services are
transferred to the customer or after the transfer of control to the customer and (3) if we have discretion in establishing
price for the specified good or service.
Advertising revenues are recognized when advertisements are published in newspapers or placed on digital
platforms or, with respect to certain digital advertising, each time a user clicks on certain advertisements, net of
provisions for estimated rebates and rate adjustments.
We recognize a rebate obligation as a reduction of revenues, based on the amount of estimated rebates that will
be earned , related to the underlying revenue transactions during the period. Measurement of the rebate obligation is
estimated based on the historical experience of the number of customers that ultimately earn and use the rebate. We
recognize an obligation for rate adjustments as a reduction of revenues, based on the amount of estimated post-billing
adjustments that will be claimed. Measurement of the rate adjustment reserve is estimated based on historical
experience of credits actually issued.
Payment for advertising is due upon complete satisfaction of our performance obligations. The Company has a
formal credit checking policy, procedures and controls in place that evaluate collectability prior to ad publication. Our
advertising contracts do not include a significant financing component.
Other revenues are recognized when the delivery occurs, services are rendered or purchases are made.
Performance Obligations
Our contracts with customers may include multiple performance obligations. For such arrangements, we allocate
revenue to each performance obligation based on its relative standalone selling price.
In the case of our digital archive licensing contracts, the transaction price was allocated among the performance
obligations, (i) the archival content and (ii) the updated content, based on the Company’s estimate of the standalone
selling price of each of the performance obligations, as they are currently not sold separately.
Contract Assets
We record revenue from performance obligations when performance obligations are satisfied. For our digital
archiving licensing revenue, we record revenue related to the portion of performance obligation (i) satisfied at the
commencement of the contract when the customer obtains control of the archival content or (ii) when the updated content
is transferred. We receive payments from customers based upon contractual billing schedules. As the transfer of control
represents a right to the contract consideration, we record a contract asset in “Other current assets” for short-term contract
assets and “Miscellaneous assets” for long-term contract assets on the Consolidated Balance Sheet for any amounts not
yet invoiced to the customer. The contract asset is reclassified to “Accounts receivable” when the customer is invoiced
based on the contractual billing schedule.
Significant Judgments
Our contracts with customers sometimes include promises to transfer multiple products and services to a
customer. Determining whether products and services are considered distinct performance obligations that should be
accounted for separately versus together may require significant judgment. We use an observable price to determine
the standalone selling price for separate performance obligations if available or, when not available, an estimate that
maximizes the use of observable inputs and faithfully depicts the selling price of the promised goods or services if we
sold those goods or services separately to a similar customer in similar circumstances.
Practical Expedients and Exemptions
We expense the cost to obtain or fulfill a contract as incurred because the amortization period of the asset that
the entity otherwise would have recognized is one year or less. We also apply the practical expedient for the
significant financing component when the difference between the payment and the transfer of the products and
services is a year or less.
P. 70 – THE NEW YORK TIMES COMPANY
Income Taxes
Income taxes are recognized for the following: (1) the amount of taxes payable for the current year and (2)
deferred tax assets and liabilities for the future tax consequences of events that have been recognized differently in the
financial statements than for tax purposes. Deferred tax assets and liabilities are established using statutory tax rates
and are adjusted for tax rate changes in the period of enactment.
We assess whether our deferred tax assets should be reduced by a valuation allowance if it is more likely than
not that some portion or all of the deferred tax assets will not be realized. Our process includes collecting positive (i.e.,
sources of taxable income) and negative (i.e., recent historical losses) evidence and assessing, based on the evidence,
whether it is more likely than not that the deferred tax assets will not be realized.
We recognize in our financial statements the impact of a tax position if that tax position is more likely than not
of being sustained on audit, based on the technical merits of the tax position. This involves the identification of
potential uncertain tax positions, the evaluation of tax law and an assessment of whether a liability for uncertain tax
positions is necessary. Different conclusions reached in this assessment can have a material impact on our
Consolidated Financial Statements.
We operate within multiple taxing jurisdictions and are subject to audit in these jurisdictions. These audits can
involve complex issues, which could require an extended period of time to resolve. Until formal resolutions are
reached between us and the tax authorities, the timing and amount of a possible audit settlement for uncertain tax
benefits is difficult to predict.
On December 22, 2017, federal tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”)
was signed into law making significant changes to the Internal Revenue Code. Changes included, but were not
limited to, a federal corporate tax rate decrease from 35% to 21% for tax years beginning after December 31, 2017, a
one-time transition tax on the mandatory deemed repatriation of foreign earnings and numerous domestic and
international-related provisions effective in 2018.
On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to address the application of
GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed
(including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act.
In accordance with SAB 118, we determined that the $68.7 million of additional income tax expense recorded in the
fourth quarter of 2017 in connection with the remeasurement of certain deferred tax assets and liabilities, the one-time
transition tax on the mandatory deemed repatriation of foreign earnings, and deferred tax assets related to executive
compensation deductions was a provisional amount and a reasonable estimate at December 31, 2017. Provisional
estimates were also made with regard to the Company’s deductions under the Tax Act’s new expensing provisions
and state and local income taxes related to foreign earnings subject to the one-time transition tax. The ultimate impact
of the Tax Act was expected to differ from the provisional amount recognized due to, among other things, changes in
estimates resulting from the receipt or calculation of final data, changes in interpretations of the Tax Act, and
additional regulatory guidance that would be issued. In the fourth quarter of 2018, in accordance with SAB 118, we
completed the accounting for the impact of the Tax Act and recognized a $1.9 million tax benefit related to 2017,
primarily attributable to the remeasurement of certain deferred tax assets and liabilities and the repatriation of foreign
earnings.
Stock-Based Compensation
We establish fair value based on market data for our stock-based awards to determine our cost and recognize
the related expense over the appropriate vesting period. We recognize stock-based compensation expense for
outstanding stock-settled long-term performance awards, restricted stock units and stock appreciation rights, net of
estimated forfeitures. See Note 16 for additional information related to stock-based compensation expense.
Earnings/(Loss) Per Share
As the Company has participating securities, GAAP requires to use the two-class method of computing
earnings per share. The two-class method is an earnings allocation method for computing earnings/(loss) per share
when a company’s capital structure includes either two or more classes of common stock or common stock and
participating securities. This method determines earnings/(loss) per share based on dividends declared on common
stock and participating securities (i.e., distributed earnings), as well as participation rights of participating securities
in any undistributed earnings.
THE NEW YORK TIMES COMPANY – P. 71
Basic earnings/(loss) per share is calculated by dividing net earnings/(loss) available to common stockholders
by the weighted-average common stock outstanding. Diluted earnings/(loss) per share is calculated similarly, except
that it includes the dilutive effect of the assumed exercise of securities and the effect of shares issuable under our
Company’s stock-based incentive plans if such effect is dilutive.
Foreign Currency Translation
The assets and liabilities of foreign companies are translated at period-end exchange rates. Results of operations
are translated at average rates of exchange in effect during the year. The resulting translation adjustment is included
as a separate component in the Stockholders’ Equity section of our Consolidated Balance Sheets, in the caption
“Accumulated other comprehensive loss, net of income taxes.”
P. 72 – THE NEW YORK TIMES COMPANY
Recently Adopted Accounting Pronouncements
Accounting
Standard
Update(s)
Topic
Effective Period
Summary
2018-05
Income Taxes
(Topic 740)
Upon issuance
2018-02
Income
Statement—
Reporting
Comprehensive
Income (Topic
220):
Reclassification
of Certain Tax
Effects from
Accumulated
Other
Comprehensive
Income
Fiscal years
beginning after
December 15,
2018, and interim
periods within
those fiscal years.
Early adoption is
permitted.
2017-07
Compensation
—Retirement
Benefits (Topic
715): Improving
the Presentation
of Net Periodic
Pension Cost
and Net Periodic
Postretirement
Benefit Cost
Fiscal years
beginning after
December 15,
2017, and interim
periods within
those fiscal years.
Early adoption is
permitted.
The Financial Accounting Standards Board (“FASB”) issued
authoritative guidance that amends Accounting Standards Codification (“ASC”)
Topic 740 “Income Taxes” to conform with SEC Staff Accounting Bulletin 118,
issued in December 2017, which allowed SEC registrants to record provisional
amounts for the year ended December 31, 2017, due to the complexities
involved in accounting for the enactment of the 2017 Tax Cuts and Jobs Act
(the “Tax Act”). In the fourth quarter of 2018, we completed our accounting for
the impact of the Tax Act and recognized a $1.9 million tax benefit.
The FASB issued authoritative guidance providing financial statement
preparers with an option to reclassify stranded tax effects within accumulated
other comprehensive income (“AOCI”) to retained earnings in each period in
which the effect of the change in the U.S. federal corporate income tax rate
related to the Tax Act is recorded.
The Company elected to adopt this guidance to reclassify the stranded
tax effects from AOCI to retained earnings in the first quarter of 2018. Our
current accounting policy related to releasing tax effects from AOCI for pension
and other postretirement benefits is a plan by plan approach. Accordingly, the
Company recorded a $94.1 million cumulative effect adjustment for stranded
tax effects, such as pension and other postretirement benefits, to “Retained
earnings” on January 1, 2018. See Note 17 for more information.
The FASB issued authoritative guidance that requires the service cost
component of net periodic benefit costs to be presented separately from the
other components of net periodic benefit costs. Service cost will be presented
with other employee compensation cost within “Operating costs.” The other
components of net periodic benefit costs, such as interest cost, amortization
of prior service cost and gains or losses, are required to be presented outside
of operations. The guidance should be applied retrospectively for the
presentation of the service cost component in the income statement and
allows a practical expedient for the estimation basis for applying the
retrospective presentation requirements. Since Accounting Standards Update
(“ASU”) 2017-07 only requires change to the Consolidated Statements of
Operations classification of the components of net periodic benefit cost, there
are no changes to income from continuing operations or net income. As a
result of the adoption of the ASU during 2018, the service cost component of
net periodic benefit costs continues to be recognized in total operating costs
and the other components of net periodic benefit costs have been reclassified
to “Other components of net periodic benefit costs/(income)” in the
Consolidated Statements of Operations below “Operating profit” on a
retrospective basis. The Company reclassified $0.9 million and $4.2 million of
credits from “Production costs” and “Selling and general and administrative
costs,” respectively, to “Other components of net periodic benefit costs/
(income)” in 2017. Additionally, in 2017, the Company recorded a gain of $32.7
million in connection with the settlement of contractual funding obligations
primarily from a postretirement plan, as well as a pension settlement charges
of $102.1 million in connection with the transfer of certain pension benefit
obligations to insurers that were reclassified from “Postretirement benefit plan
withdrawal expense” and “Pension settlement expense”, respectively, to “Other
components of net periodic benefit costs”. This recast increased the full year
2017 “Operating costs” by $5.1 million while “Operating profit” increased $64.2.
The Company reclassified $1.3 million and $7.2 million of credits from
“Production costs” and “Selling and general and administrative costs,”
respectively, to “Other components of net periodic benefit costs/(income)”
during 2016. Additionally, in 2016 the Company reclassified $1.7 million of
pension credits out of “Restructuring charge” and $21.3 million of pension
settlement charges out of “Pension settlement expense” into “Other
components of net periodic benefit costs”. This recast increased the full year
2016 “Operating costs” by $8.5 million while “Operating profit” increased $11.1
million. There was no impact to net income for 2017 or 2016. See Note 10 for
the components of net periodic benefit costs/(income) for our pension and
other postretirement benefits plans.
THE NEW YORK TIMES COMPANY – P. 73
Accounting
Standard
Update(s)
Topic
Effective Period
Summary
2016-18
Statement of
Cash Flow:
Restricted Cash
Fiscal years
beginning after
December 15,
2017, and interim
periods within
those fiscal years.
Early adoption is
permitted.
2016-01
2018-03
Financial
Instruments—
Overall:
Recognition and
Measurement of
Financial Assets
and Financial
Liabilities
Fiscal years
beginning after
December 15,
2017, and interim
periods within
those fiscal years.
The FASB issued authoritative guidance that amends the guidance in
ASC 230 on the classification and presentation of restricted cash in the
statement of cash flows. The key requirements of the ASU are: (1) all entities
should include in their cash and cash-equivalent balances in the statements of
cash flows those amounts that are deemed to be restricted cash or restricted
cash equivalents, (2) a reconciliation between the statement of financial
position and the statement of cash flows must be disclosed when the
statement of financial position includes more than one line item for cash, cash
equivalents and restricted cash, (3) changes in restricted cash that result from
transfers between cash, cash equivalents and restricted cash should not be
presented as cash flow activities in the statement of cash flows and (4) an
entity with a material balance of amounts generally described as restricted
cash must disclose information about the nature of the restrictions.
As a result of the adoption of ASU 2016-18 in 2018, the Company
included the restricted cash balance with the cash and cash equivalents
balances in the Consolidated Statements of Cash Flows on a retrospective
basis. The reclassification did not have a material impact to the Consolidated
Statement of Cash Flows for 2017 and 2016. The Company has added a
reconciliation from the Consolidated Balance Sheets to the Consolidated
Statement of Cash Flows. See Note 8 for more information.
The FASB issued authoritative guidance that addresses certain
aspects of recognition, measurement, presentation and disclosure of financial
instruments, including requirements to measure most equity investments at
fair value with changes in fair value recognized in net income, to perform a
qualitative assessment of equity investments without readily determinable fair
values, and to separately present financial assets and liabilities by
measurement category and by type of financial asset on the balance sheet or
the accompanying notes to the financial statements.
We adopted ASU 2016-01 in the first quarter of 2018 and elected the
measurement alternative, defined as cost, less impairments, adjusted by
observable price changes, given our equity instruments are without readily
determinable fair values. This guidance did not impact our AFS securities
because we only hold debt securities. We also early adopted ASU 2018-03 in
the first quarter of 2018. The adoptions of ASU 2016-01 and ASU 2018-03 did
not have a material effect on our Consolidated Financial Statements. See Note
6 for more information.
P. 74 – THE NEW YORK TIMES COMPANY
Accounting
Standard
Update(s)
Topic
Effective Period
Summary
2014-09
2016-08
2016-10
2016-12
Revenue from
Contracts with
Customers
(Topic 606)
Fiscal years
beginning after
December 31,
2017
The FASB issued authoritative guidance that prescribes a single
comprehensive model for entities to use in the accounting of revenue arising
from contracts with customers. The new guidance supersedes virtually all
existing revenue guidance under GAAP. There are two transition options
available to entities: the full retrospective approach or the modified
retrospective approach.
On January 1, 2018, the Company adopted Topic 606. The Company
has elected the modified retrospective approach, which allows for the new
revenue standard to be applied to all existing contracts as of the effective date
and a cumulative catch-up adjustment to be recorded to “Retained earnings.”
The Company recognizes revenue under the core principle to depict the
transfer of control to the Company’s customers in an amount reflecting the
consideration to which the Company expects to be entitled. In order to achieve
that core principle, the Company applies the following five-step approach: (1)
identify the contract with a customer, (2) identify the performance obligations
in the contract, (3) determine the transaction price, (4) allocate the transaction
price to the performance obligations in the contract and (5) recognize revenue
when a performance obligation is satisfied.
The most significant change to the Company’s accounting practices
related to accounting for certain licensing arrangements in the other revenue
category for which archival and updated content is included. Under the former
revenue guidance, licensing revenue was generally recognized over the term
of the contract based on the annual minimum guarantee amount specified in
the contractual agreement with the licensee. Based on the guidance of Topic
606, the Company has determined that the archival content and updated
content included in these licensing arrangements represent two separate
performance obligations. As such, a portion of the total contract consideration
related to the archival content was recognized at the commencement of the
contract when control of the archival content is transferred. The remaining
contractual consideration will be recognized proportionately over the term of
the contract when updated content is transferred to the licensee, in line with
when the control of the new content is transferred.
The net impact of these changes accelerated the revenue of contracts
not completed as of January 1, 2018. In connection with the adoption of the
standard the Company recorded a net increase to opening retained earnings
of $2.6 million ($3.5 million before tax) and a contract asset of $3.5 million,
with $1.3 million categorized as a current asset and $2.2 million categorized
as a long term asset as of January 1, 2018. The impact to “Other revenues” as
a result of applying Topic 606 was a decrease of $1.3 million for the twelve
months ended December 30, 2018.
Our subscription and advertising revenues were not affected by the
new guidance. See Note 3 for more information on our revenues and the
application of Topic 606.
THE NEW YORK TIMES COMPANY – P. 75
Recently Issued Accounting Pronouncements
Accounting
Standard
Update(s)
Topic
Effective Period
Summary
2018-15
Intangibles—
Goodwill and
Other—Internal-
Use Software
2018-14
Compensation
—Retirement
Benefits—
Defined Benefit
Plans—General
2016-13
2018-19
Financial
Instruments—
Credit Losses
Fiscal years
beginning after
December 15,
2019, and interim
periods within
those fiscal years.
Early adoption is
permitted.
Fiscal years
ending after
December 15,
2020, and interim
periods within
those fiscal years.
Early adoption is
permitted.
Fiscal years
beginning after
December 15,
2019, and interim
periods within
those fiscal years.
Early adoption is
permitted for fiscal
years beginning
after
December 15,
2018, and interim
periods within
those fiscal years.
2016-02
2018-10
2018-11
2018-20
Leases
Fiscal years
beginning after
December 30,
2018. Early
adoption is
permitted.
The FASB issued authoritative guidance that clarifies the accounting for
implementation costs in cloud computing arrangements. The standard provides
that implementation costs be evaluated for capitalization using the same criteria
as that used for internal-use software development costs, with amortization
expense being recorded in the same income statement expense line as the
hosted service costs and over the expected term of the hosting arrangement.
We are currently in the process of evaluating the impact of this guidance on our
consolidated financial statements.
The FASB issued authoritative guidance that modifies the disclosure
requirements for employers that sponsor defined benefit pension or other
postretirement benefit plans. The guidance removes disclosures, clarifies the
specific requirements of disclosures and adds disclosure requirements identified
as relevant. We are currently in the process of evaluating the impact of this
guidance on our consolidated financial statements.
The FASB issued authoritative guidance that amends guidance on
reporting credit losses for assets, including trade receivables, available-for-sale
marketable securities and any other financial assets not excluded from the scope
that have the contractual right to receive cash. For trade receivables, ASU 2016-13
eliminates the probable initial recognition threshold in current generally accepted
accounting standards, and, instead, requires an entity to reflect its current
estimate of all expected credit losses. The allowance for credit losses is a
valuation account that is deducted from the gross trade receivables balance to
present the net amount expected to be collected. For available-for-sale
marketable securities, credit losses should be measured in a manner similar to
current generally accepted accounting standards; however, ASU 2016-13 will
require that credit losses be presented as an allowance rather than as a write-
down. We are currently in the process of evaluating the impact of this guidance
on our consolidated financial statements.
The FASB issued authoritative guidance that provides guidance on
accounting for leases and disclosure of key information about leasing
arrangements. The guidance issued in 2016 was subsequently amended in the
2018 ASU updates (collectively, “Topic 842”). Topic 842 requires lessees to
recognize the following for all operating and finance leases at the commencement
date: (1) a lease liability, which is the obligation to make lease payments arising
from a lease, measured on a discounted basis, and (2) a right-of-use asset
representing the lessee’s right to use, or control the use of, the underlying asset
for the lease term. A lessee is permitted to make an accounting policy election
not to recognize lease assets and lease liabilities for short-term leases with a
term of 12 months or less. The guidance does not fundamentally change lessor
accounting; however, some changes have been made to align that guidance with
the lessee guidance and other areas within GAAP. It requires that reimbursable
expenses from a lessee be reported gross on the Consolidated Statement of
Operations.
The Company expects to adopt this guidance in the first quarter of 2019
utilizing the alternative transition method. Upon adoption, the Company expects
to elect the transition package of practical expedients permitted within the new
standard, which, among other things, allows the carryforward of the historical
lease classification and allows the Company to recognize a cumulative effect
adjustment to the opening balance of retained earnings. The Company continues
to evaluate which other, if any, practical expedients will be elected.
The adoption of the standards will require us to add right-of-use assets
and lease liabilities onto our balance sheet. Based on our lease portfolio at
December 30, 2018, the right-of-use asset and lease liability would have been
in the range of $35 million to $40 million on our Consolidated Balance Sheets
based on the remaining lease payments. We do not expect the lessee guidance
to have a material impact to our Consolidated Statement of Operations or liquidity.
The Company considers the applicability and impact of all recently issued accounting pronouncements. Recent
accounting pronouncements not specifically identified in our disclosures are either not applicable to the Company or
are not expected to have a material effect on our financial condition or results of operations.
P. 76 – THE NEW YORK TIMES COMPANY
3. Revenue
We generate revenues principally from subscriptions and advertising. Subscription revenues consist of revenues
from subscriptions to our print and digital products (which include our news product, as well as our Crossword and
Cooking products) and single-copy and bulk sales of our print products. Subscription revenues are based on both the
number of copies of the printed newspaper sold and digital-only subscriptions, and the rates charged to the
respective customers.
Advertising revenues are derived from the sale of our advertising products and services on our print and
digital platforms. These revenues are primarily determined by the volume, rate and mix of advertisements.
Other revenues primarily consist of revenues from licensing, affiliate referrals (revenue generated by offering
direct links to merchants in exchange for a portion of the sale price), building rental revenue, commercial printing,
NYT Live (our live events business) and retail commerce.
Subscription, advertising and other revenues were as follows:
(In thousands)
Subscription
Advertising
Other (1)
Total
Years Ended
December 30,
2018
December 31,
2017
December 25,
2016
(52 weeks)
(53 weeks)
(52 weeks)
$
$
1,042,571
$
1,008,431
$
558,253
147,774
558,513
108,695
880,543
580,732
94,067
1,748,598
$
1,675,639
$
1,555,342
(1) Other revenue includes building rental revenue, which is not under the scope of Topic 606. Building rental revenue was approximately $23
million for the year ended December 30, 2018 and approximately $17 million for the years ended December 31, 2017 and December 25, 2016.
The following table summarizes digital-only subscription revenues, which are a component of subscription
revenues above, for the years ended December 30, 2018, December 31, 2017 and December 25, 2016:
(In thousands)
Digital-only subscription revenues:
News product subscription revenues(1)
Other product subscription revenues(2)
Total digital-only subscription revenues
Years Ended
December 30,
2018
December 31,
2017
December 25,
2016
(52 weeks)
(53 weeks)
(52 weeks)
$
$
378,484
$
22,136
400,620
$
325,956
14,387
340,343
223,459
9,369
232,828
(1) Includes revenues from subscriptions to the Company’s news product. News product subscription packages that include access to the
Company’s Crossword and Cooking products are also included in this category.
(2) Includes revenues from standalone subscriptions to the Company’s Crossword and Cooking products.
Advertising revenues (print and digital) by category were as follows:
December 30, 2018
December 31, 2017
December 25, 2016
(52 weeks)
(53 weeks)
(52 weeks)
Years Ended
(In thousands)
Print
Digital
Total
Print
Digital
Total
Print
Digital
Total
Display
Other
$ 269,160
$ 202,038
$ 471,198
$ 285,679
$ 198,658
$ 484,337
$ 335,652
$ 181,545
$ 517,197
30,220
56,835
87,055
34,543
39,633
74,176
36,328
27,207
63,535
Total advertising
$ 299,380
$ 258,873
$ 558,253
$ 320,222
$ 238,291
$ 558,513
$ 371,980
$ 208,752
$ 580,732
THE NEW YORK TIMES COMPANY – P. 77
Performance Obligations
Revenue is recognized when a performance obligation is satisfied by transferring a promised good or service to
a customer. In the case of our digital archive licensing contracts, the transaction price was allocated among the
performance obligations, (i) the archival content and (ii) the updated content, based on the Company’s estimate of the
standalone selling price of each of the performance obligations, as they are currently not sold separately.
As of December 30, 2018, the aggregate amount of the transaction price allocated to the remaining performance
obligations was approximately $27 million. The Company will recognize this revenue as control of the performance
obligation is transferred to the customer. We expect that approximately $12 million, $12 million, $2 million and $1
million will be recognized in 2019, 2020, 2021 and 2022, respectively.
Contract Assets
As of December 30, 2018, the Company had $2.5 million in contract assets recorded in the Consolidated Balance
Sheet related to digital archiving licensing revenue. The contract asset is reclassified to “Accounts receivable” when
the customer is invoiced based on the contractual billing schedule. The increase in the contract assets balance for
the year ended December 30, 2018, is primarily driven by the cumulative catch-up adjustment recorded by the
Company on January 1, 2018, of $3.5 million as a result of adoption of Topic 606, offset by $1.0 million of
consideration that was reclassified to “Accounts receivable” when invoiced based on the contractual billing schedules
for the period ended December 30, 2018.
Significant Judgments
Our contracts with customers sometimes include promises to transfer multiple products and services to a
customer. Determining whether products and services are considered distinct performance obligations that should be
accounted for separately versus together may require significant judgment. We use an observable price to determine
the standalone selling price for separate performance obligations if available or, when not available, an estimate that
maximizes the use of observable inputs and faithfully depicts the selling price of the promised goods or services if we
sold those goods or services separately to a similar customer in similar circumstances.
Practical Expedients and Exemptions
We expense the cost to obtain or fulfill a contract as incurred because the amortization period of the asset that
the entity otherwise would have recognized is one year or less. We also apply the practical expedient for the
significant financing component when the difference between the payment and the transfer of the products and
services is a year or less.
P. 78 – THE NEW YORK TIMES COMPANY
4. Marketable Securities
The Company accounts for its marketable securities as AFS. The Company recorded $2.8 million and $2.5
million of net unrealized loss in AOCI as of December 30, 2018, and December 31, 2017, respectively.
The following tables present the amortized cost, gross unrealized gains and losses, and fair market value of our
AFS securities as of December 30, 2018, and December 31, 2017:
(In thousands)
Short-term AFS securities
Corporate debt securities
U.S. Treasury securities
U.S. governmental agency securities
Certificates of deposit
Commercial paper
Total short-term AFS securities
Long-term AFS securities
Corporate debt securities
U.S. Treasury securities
U.S. governmental agency securities
Total long-term AFS securities
(In thousands)
Short-term AFS securities
Corporate debt securities
U.S. Treasury securities
U.S. governmental agency securities
Certificates of deposit
Commercial paper
Total short-term AFS securities
Long-term AFS securities
Corporate debt securities
U.S. Treasury securities
U.S. governmental agency securities
Total long-term AFS securities
Amortized Cost
$
140,631
$
107,717
92,628
23,497
8,177
372,650
$
December 30, 2018
Gross
unrealized
gains
Gross
unrealized
losses
Fair Value
1
—
—
—
—
1
$
(464) $
(232)
(654)
—
—
140,168
107,485
91,974
23,497
8,177
$
(1,350) $
371,301
130,612
$
44
$
(1,032) $
129,624
47,079
37,362
5
3
(347)
(168)
46,737
37,197
215,053
$
52
$
(1,547) $
213,558
$
$
$
Amortized Cost
Gross unrealized
gains
Gross unrealized
losses
Fair Value
December 31, 2017
$
$
$
$
150,334
$
— $
(227)
$
150,107
70,985
45,819
9,300
32,591
—
—
—
—
(34)
(179)
—
—
70,951
45,640
9,300
32,591
309,029
$
— $
(440)
$
308,589
92,687
$
— $
53,031
97,798
—
—
(683)
(403)
(1,019)
92,004
52,628
96,779
243,516
$
— $
(2,105)
$
241,411
THE NEW YORK TIMES COMPANY – P. 79
The following tables present the AFS securities as of December 30, 2018, and December 31, 2017 that were in an
unrealized loss position, aggregated by investment category and the length of time that individual securities have
been in a continuous loss position:
Less than 12 Months
12 Months or Greater
Total
December 30, 2018
(In thousands)
Fair Value
Short-term AFS securities
Gross
unrealized
losses
Fair Value
Gross
unrealized
losses
Fair Value
Gross
unrealized
losses
Corporate debt securities
$
76,886
$
(115) $
61,459
$
(349) $
138,345
$
U.S. Treasury securities
U.S. governmental agency
securities
Certificates of deposit
Total short-term AFS securities
Long-term AFS securities
Corporate debt securities
U.S. Treasury securities
U.S. governmental agency
securities
$
$
$
70,830
11,664
1,599
160,979
$
$
(31)
(4)
28,207
80,311
(201)
(650)
— $
— $
— $
99,037
91,975
1,599
(150) $
169,977
$
(1,200) $
330,956
$
$
(464)
(232)
(654)
—
(1,350)
81,655
$
(570) $
27,265
$
(462) $
108,920
$
(1,032)
20,479
21,579
(29)
(36)
23,762
11,868
(318)
(132)
44,241
33,447
(347)
(168)
Total long-term AFS securities
$
123,713
$
(635) $
62,895
$
(912) $
186,608
$
(1,547)
Less than 12 Months
12 Months or Greater
Total
December 31, 2017
(In thousands)
Fair Value
Short-term AFS securities
Gross
unrealized
losses
Fair Value
Gross
unrealized
losses
Fair Value
Gross
unrealized
losses
Corporate debt securities
$
140,111
$
(199) $
9,996
$
(28) $
150,107
$
U.S. Treasury securities
U.S. governmental agency
securities
70,951
19,770
(34)
(50)
—
—
70,951
25,870
(129)
45,640
Total short-term AFS securities
$
230,832
$
(283) $
35,866
$
(157) $
266,698
$
Long-term AFS securities
Corporate debt securities
$
81,118
$
(579) $
10,886
$
(104) $
92,004
$
U.S. Treasury securities
U.S. governmental agency
securities
52,628
23,998
(403)
(125)
—
—
52,628
72,781
(894)
96,779
Total long-term AFS securities
$
157,744
$
(1,107) $
83,667
$
(998) $
241,411
$
(227)
(34)
(179)
(440)
(683)
(403)
(1,019)
(2,105)
We periodically review our AFS securities for OTTI. See Note 2 for factors we consider when assessing AFS
securities for OTTI. As of December 30, 2018, and December 31, 2017, we did not intend to sell and it was not likely
that we would be required to sell these investments before recovery of their amortized cost basis, which may be at
maturity. Unrealized losses related to these investments are primarily due to interest rate fluctuations as opposed to
changes in credit quality. Therefore, as of December 30, 2018 and December 31, 2017, we have recognized no OTTI
loss.
P. 80 – THE NEW YORK TIMES COMPANY
Marketable debt securities
As of December 30, 2018, and December 31, 2017, our short-term and long-term marketable securities had
remaining maturities of less than 1 month to 12 months and 13 months to 34 months, respectively. See Note 9 for
additional information regarding the fair value hierarchy of our marketable securities.
Letters of credit
We issued letters of credit totaling $48.8 million as of December 30, 2018, to secure commitments under certain
sub-lease agreements associated with the rental of floors in our headquarters building. The letters of credit will expire
by 2020, and are collateralized by marketable securities, with a fair value of $54.2 million, held in our investment
portfolios. No amounts were outstanding on these letters of credit as of December 30, 2018. See Note 19 for additional
information regarding the securities commitment.
5. Goodwill and Intangibles
In 2016, the Company acquired two digital marketing agencies, HelloSociety, LLC and Fake Love, LLC for an
aggregate of $15.4 million, in separate all-cash transactions. Also in 2016, the Company acquired Submarine Leisure
Club, Inc., which owned the product review and recommendation website, Wirecutter, in an all-cash transaction. We
paid $25.0 million, including a payment made for a non-compete agreement, and also entered into a consulting
agreement and retention agreements that will likely require payments over the three years following the acquisition.
The Company allocated the purchase prices for these acquisitions based on the final valuation of assets
acquired and liabilities assumed, resulting in allocations to goodwill, intangibles, property, plant and equipment and
other miscellaneous assets.
The aggregate carrying amount of intangible assets of $6.2 million related to these acquisitions has been
included in “Miscellaneous Assets” in our Consolidated Balance Sheets. The estimated useful lives for these assets
range from 3 to 7 years and are amortized on a straight-line basis.
The changes in the carrying amount of goodwill as of December 30, 2018, and since December 25, 2016, were as
follows:
(In thousands)
Balance as of December 25, 2016
Measurement Period Adjustment(1)
Foreign currency translation
Balance as of December 31, 2017
Foreign currency translation
Balance as of December 30, 2018
Total Company
$
134,517
(198)
9,230
143,549
(3,267)
$
140,282
(1) Includes measurement period adjustment in connection with the Submarine Leisure Club, Inc. acquisition.
The foreign currency translation line item reflects changes in goodwill resulting from fluctuating exchange rates
related to the consolidation of certain international subsidiaries.
6. Investments
Investments in Joint Ventures
As of December 30, 2018, the value of our investments in joint ventures was zero. As of December 31, 2017, our
investment in joint ventures totaled $1.7 million and consisted of a 40% equity ownership interest in Madison Paper
Industries (“Madison”), a partnership that previously operated a supercalendered paper mill in Maine. In the fourth
quarter of 2017, we sold our 49% equity interest in Donohue Malbaie Inc. (“Malbaie”), a Canadian newsprint
company, for $20 million Canadian dollars ($15.6 million USD).
THE NEW YORK TIMES COMPANY – P. 81
These investments are accounted for under the equity method, and are recorded in “Miscellaneous assets” in
our Consolidated Balance Sheets. Our proportionate shares of the operating results of our investments are recorded in
“Gain/(loss) from joint ventures” in our Consolidated Statements of Operations.
In 2018, we had a gain from joint ventures of $10.8 million. The gain was primarily due to a distribution
received from the pending liquidation of Madison, offset, in part, by our share of operating expenses of the
partnership.
In 2017, we had a gain from joint ventures of $18.6 million. The gain was primarily due to the sale of assets of
the paper mill previously operated by Madison, partially offset by our proportionate share of the loss recognized by
Madison resulting from Madison’s settlement of pension obligations, as well as the sale of our investment in Malbaie.
In 2016, we had a loss from joint ventures of $36.3 million. The loss was primarily due to the shutdown of the
Madison paper mill, as described below, partially offset by increased income from our investment in Malbaie, which
benefited from higher newsprint prices and the impact of a significantly weakened Canadian dollar.
Madison
The Company and UPM-Kymmene Corporation (“UPM”), a Finnish paper manufacturing company, are
partners through subsidiary companies in Madison. The Company’s 40% ownership of Madison is through an 80%-
owned consolidated subsidiary that owns 50% of Madison. UPM owns 60% of Madison, including a 10% interest
through a 20% noncontrolling interest in the consolidated subsidiary of the Company. In 2016, the paper mill closed
and the Company’s joint venture in Madison is currently being liquidated.
In connection with the 2016 closure of the paper mill we recognized $41.4 million in losses from joint ventures.
In the fourth quarter of 2016, Madison sold certain assets at the mill site and we recognized a gain of $3.9 million
related to the sale. In 2017 we recognized a gain of $20.8 million, primarily related to the sale of the remaining assets
(which consisted of primarily hydro power assets), partially offset by the loss related to our proportionate share of
Madison’s settlement of certain pension obligations. In 2018, we recorded a gain of $11.3 million due to a distribution
received from the pending liquidation of Madison.
The following table presents summarized unaudited balance sheet information for Madison, which follows a
calendar year:
December 31,
2018
December 31,
2017
$
18,374
$
35,764
—
18,374
3,336
—
3,336
9,640
45,404
137
4,070
4,207
$
15,038
$
41,197
(In thousands)
Current assets
Noncurrent assets
Total assets
Current liabilities
Noncurrent liabilities
Total liabilities
Total equity
P. 82 – THE NEW YORK TIMES COMPANY
The following table presents summarized unaudited income statement information for Madison, which follows
a calendar year:
(In thousands)
Revenues
Income/(Expenses):
Cost of sales(1)
General and administrative income/(expense) and other(2)
Total income/(expense)
Operating income/(loss)
Other income/(expense)
Net income/(loss)
For the Twelve Months Ended
December 31,
2018
December 31,
2017
December 31,
2016
$
— $
— $
40,523
—
(13,396)
(63,439)
(1,280)
(1,280)
(1,280)
122
55,058
41,662
41,662
18
(62,759)
(126,198)
(85,675)
2
$
(1,158)
$
41,680
$
(85,673)
(1) Primarily represents Madison’s settlement of its pension obligations in 2017.
(2) Primarily represents gains/(losses) from the sale of assets and closure of Madison in 2017 and 2016.
During 2018, we received a $12.5 million cash distribution in connection with the pending liquidation of
Madison. We received no distributions from Madison in 2017 or 2016.
Malbaie
We had a 49% equity interest in Malbaie, which we sold during the fourth quarter of 2017 for $20 million
Canadian dollars ($15.6 million USD). We recognized a loss of $6.4 million before tax as a result of the sale. The other
51% equity interest was owned by Resolute FP Canada Inc., a subsidiary of Resolute Forest Products Inc. (“Resolute”),
a Delaware corporation. Resolute is a large global manufacturer of paper, market pulp and wood products.
Other than from the sale of our equity interest in 2017, we received no distributions from Malbaie in 2018, 2017
or 2016.
Other
We purchased newsprint from Malbaie, and previously purchased supercalendered paper from Madison, at
competitive prices. These purchases totaled approximately $11 million in 2017 and $14 million in 2016.
Non-Marketable Equity Securities
Our non-marketable equity securities are investments in privately held companies/funds without readily
determinable market values. Realized gains and losses on non-marketable securities sold or impaired are recognized
in “Interest expense and other, net.”
As of December 30, 2018, and December 31, 2017, non-marketable equity securities included in “Miscellaneous
assets’’ in our Consolidated Balance Sheets had a carrying value of $13.7 million and $13.6 million, respectively. We
did not have any material fair value adjustments in 2018 and 2017.
THE NEW YORK TIMES COMPANY – P. 83
7. Debt Obligations
Our indebtedness primarily consisted of the repurchase option related to a sale-leaseback of a portion of our
New York headquarters. Our total debt and capital lease obligations consisted of the following:
(In thousands)
Option to repurchase ownership interest in headquarters building in 2019:
December 30,
2018
December 31,
2017
Principal amount
$
250,000
$
250,000
Less unamortized discount based on imputed interest rate of 13.0%
Net option to repurchase ownership interest in headquarters building in 2019
Capital lease obligations
Total debt and capital lease obligations
Less current portion
3,202
6,596
246,798
243,404
6,832
253,630
253,630
6,805
250,209
—
Total long-term debt and capital lease obligations
$
— $
250,209
See Note 9 for more information regarding the fair value of our debt.
The aggregate face amount of maturities of debt over the next five years and thereafter is as follows:
(In thousands)
2019
2020
2021
2022
2023
Thereafter
Total face amount of maturities
Less: Unamortized debt costs and discount
Carrying value of debt (excludes capital leases)
Amount
$
250,000
—
—
—
—
—
250,000
(3,202)
$
246,798
“Interest expense and other, net,” as shown in the accompanying Consolidated Statements of Operations was as
follows:
(In thousands)
Interest expense
Amortization of debt costs and discount on debt
Capitalized interest
Interest income and other expense, net
Total interest expense and other, net
P. 84 – THE NEW YORK TIMES COMPANY
December 30,
2018
December 31,
2017
December 25,
2016
$
28,134
$
27,732
$
39,487
3,394
(452)
(14,510)
3,205
(1,257)
(9,897)
4,897
(559)
(9,020)
$
16,566
$
19,783
$
34,805
Sale-Leaseback Financing
In March 2009, we entered into an agreement to sell and simultaneously lease back a portion of our leasehold
condominium interest in our Company’s headquarters building located at 620 Eighth Avenue in New York City (the
“Condo Interest”). The sale price for the Condo Interest was $225.0 million less transaction costs, for net proceeds of
approximately $211 million. We have an option, exercisable in the fourth quarter of 2019, to repurchase the Condo
Interest for $250.0 million, and we have delivered notice of our intent to exercise this option.
The transaction is accounted for as a financing transaction. As such, we have continued to depreciate the Condo
Interest and account for the rental payments as interest expense. The difference between the purchase option price of
$250.0 million and the net sale proceeds of approximately $211 million, or approximately $39 million, is being
amortized over a 10-year period through interest expense. The effective interest rate on this transaction was
approximately 13%.
8. Other
Capitalized Computer Software Costs
Amortization of capitalized computer software costs included in “Depreciation and amortization” in our
Consolidated Statements of Operations was $15.7 million, $12.8 million and $11.5 million for the fiscal years ended
December 30, 2018, December 31, 2017 and December 25, 2016, respectively. The unamortized computer software
costs were $29.5 million and $28.1 million as of December 30, 2018, and December 31, 2017, respectively.
Headquarters Redesign and Consolidation
In December 2016, we announced plans to redesign our headquarters building, consolidate our space within a
smaller number of floors and lease the additional floors to third parties. We incurred $4.5 million and $10.1 million of
total costs related to these measures for the fiscal year ended December 30, 2018, and December 31, 2017, respectively.
We capitalized approximately $15 million and $62 million for the fiscal year ended December 30, 2018, and
December 31, 2017, respectively. This project is substantially complete as of December 30, 2018.
Marketing Expenses
Marketing expense to promote our brand and products and grow our subscriber base (which we formerly
referred to as advertising expense) was $156.3 million, $118.6 million and $89.8 million for the fiscal years ended
December 30, 2018, December 31, 2017 and December 25, 2016, respectively. We expense our marketing costs as
incurred.
Statement of Cash Flow
Restricted Cash
A reconciliation of cash, cash equivalents and restricted cash as of December 30, 2018 and December 31, 2017
from the Consolidated Balance Sheets to the Consolidated Statements of Cash Flows is as follows:
(In thousands)
December 30, 2018
December 31, 2017
Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents
Restricted cash included within other current assets
Restricted cash included within miscellaneous assets
Total cash, cash equivalents and restricted cash shown in the Consolidated
Statements of Cash Flows
$
$
241,504
$
642
17,653
182,911
375
17,650
259,799
$
200,936
Substantially all of the amount included in restricted cash is set aside to collateralize workers’ compensation
obligations.
Tax Shortfall and/or Windfall for Stock-based Payments
In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update
(“ASU”) 2016-09, “Compensation-Stock Compensation,” which provides guidance on accounting for stock-based
payment transactions, including the income tax consequences, classification of awards as either equity or liabilities,
THE NEW YORK TIMES COMPANY – P. 85
and classification on the statement of cash flows. This guidance became effective for the Company for fiscal years
beginning after December 25, 2016.
As a result of the adoption of ASU 2016-09 in the first quarter of 2017, we recognized excess tax windfalls in
income tax expense rather than additional paid-in capital. Excess tax shortfalls and/or windfalls for stock-based
payments are now included in net cash from operating activities rather than net cash from financing activities. The
changes have been applied prospectively in accordance with the ASU and prior periods have not been adjusted.
Severance Costs
We recognized severance costs of $6.7 million for the fiscal year ended December 30, 2018. On May 31, 2017, we
announced certain measures designed to streamline our editing process and allow us to make further investments in
the newsroom. These measures resulted in a workforce reduction primarily affecting our newsroom. We recognized
severance costs of $23.9 million in 2017, substantially all of which were related to this workforce reduction. We
recognized severance costs of $18.8 million in 2016. These costs are recorded in “Selling, general and administrative
costs” in our Consolidated Statements of Operations.
Additionally, during the second quarter of 2016, we announced certain measures to streamline our international
print operations and support future growth efforts. These measures included a redesign of our international print
newspaper and the relocation of certain editing and production operations conducted in Paris to our locations in
Hong Kong and New York. During 2016, we incurred $2.9 million and $11.9 million, respectively, of total costs related
to the measures, primarily related to relocation and severance charges. These costs were recorded in “Restructuring
charge” in our Consolidated Statements of Operations. In connection with the adoption of ASU 2017-07, $1.7 million
related to a gain from the pension curtailment previously included within “Restructuring charge” was reclassified to
“Other components of net periodic benefit costs”.
We had a severance liability of $8.4 million and $18.8 million included in “Accrued expenses and other” in our
Consolidated Balance Sheets as of December 30, 2018 and December 31, 2017, respectively. We anticipate most of the
payments will be made within the next twelve months.
P. 86 – THE NEW YORK TIMES COMPANY
9. Fair Value Measurements
Fair value is the price that would be received upon the sale of an asset or paid upon transfer of a liability in an
orderly transaction between market participants at the measurement date. The transaction would be in the principal
or most advantageous market for the asset or liability, based on assumptions that a market participant would use in
pricing the asset or liability. The fair value hierarchy consists of three levels:
Level 1–quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability
to access at the measurement date;
Level 2–inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly; and
Level 3–unobservable inputs for the asset or liability.
Assets/Liabilities Measured and Recorded at Fair Value on a Recurring Basis
As of December 30, 2018 and December 31, 2017, we had assets related to our qualified pension plans measured
at fair value. The required disclosures regarding such assets are presented in Note 10.
The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as
of December 30, 2018 and December 31, 2017:
December 30, 2018
December 31, 2017
Total
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
(In thousands)
Assets:
Short-term AFS securities(1)
Corporate debt securities
$ 140,168
$
— $ 140,168
$
— $ 150,107
$
— $ 150,107
$
U.S Treasury securities
107,485
U.S. governmental agency securities
91,974
Certificates of deposit
Commercial paper
23,497
8,177
—
—
—
—
107,485
91,974
23,497
8,177
—
—
—
—
70,951
45,640
9,300
32,591
—
—
—
—
70,951
45,640
9,300
32,591
Total short-term AFS securities
$ 371,301
$
— $ 371,301
$
— $ 308,589
$
— $ 308,589
$
Long-term AFS securities(1)
Corporate debt securities
$ 129,624
$
— $ 129,624
$
— $ 92,004
$
— $ 92,004
$
U.S Treasury securities
46,737
U.S. governmental agency securities
37,197
—
—
46,737
37,197
—
—
52,628
96,779
—
—
52,628
96,779
Total long-term AFS securities
$ 213,558
$
— $ 213,558
$
— $ 241,411
$
— $ 241,411
$
—
—
—
—
—
—
—
—
—
—
Liabilities:
Deferred compensation(2)(3)
$ 23,211
$ 23,211
$
— $
— $ 29,526
$ 29,526
$
— $
—
(1) We classified these investments as Level 2 since the fair value is based on market observable inputs for investments with similar terms and
maturities.
(2) The deferred compensation liability, included in “Other liabilities—Other” in our Consolidated Balance Sheets, consists of deferrals under The
New York Times Company Deferred Executive Compensation Plan (the “DEC”), a frozen plan which enabled certain eligible executives to elect
to defer a portion of their compensation on a pre-tax basis. The deferred amounts are invested at the executives’ option in various mutual funds.
The fair value of deferred compensation is based on the mutual fund investments elected by the executives and on quoted prices in active
markets for identical assets. Participation in the DEC was frozen effective December 31, 2015. Refer to Note 12 for detail.
(3) The Company invests deferred compensation in life insurance products. Our investments in life insurance products are included in
“Miscellaneous assets” in our Consolidated Balance Sheets, and were $38.1 million as of December 30, 2018, and $40.3 million as of
December 31, 2017. The fair value of these assets is measured using the net asset value (“NAV”) per share (or its equivalent) and has not been
classified in the fair value hierarchy.
THE NEW YORK TIMES COMPANY – P. 87
Financial Instruments Disclosed, But Not Reported, at Fair Value
The carrying value of our debt was approximately $247 million as of December 30, 2018, and approximately
$243 million as of December 31, 2017. The fair value of our debt was approximately $260 million and $279 million as
of December 30, 2018, and December 31, 2017, respectively. We estimate the fair value of our debt utilizing market
quotations for debt that have quoted prices in active markets. Since our debt does not trade in an active market, the
fair value estimates are based on market observable inputs based on borrowing rates currently available for debt with
similar terms and average maturities (Level 2).
Assets Measured and Recorded at Fair Value on a Non-Recurring Basis
Certain non-financial assets, such as goodwill, intangible assets, property, plant and equipment and certain
investments are only recorded at fair value if an impairment charge is recognized. Goodwill and intangible assets are
initially recorded at fair value in purchase accounting. We classified all of these measurements as Level 3, as we used
unobservable inputs within the valuation methodologies that were significant to the fair value measurements, and the
valuations required management‘s judgment due to the absence of quoted market prices. There was no impairment
recognized in 2018, 2017 and 2016.
10. Pension Benefits
Single-Employer Plans
We sponsor several frozen single-employer defined benefit pension plans. The Company and The NewsGuild
of New York jointly sponsor the Guild-Times Adjustable Pension Plan which continues to accrue active benefits.
Effective January 1, 2018, the Company became the sole sponsor of the frozen Newspaper Guild of New York - The
New York Times Pension Plan (the “Guild-Times Plan”). The Guild-Times Plan was previously joint trusteed between
the Guild and the Company. Effective December 31, 2018, the Guild-Times Plan and the Retirement Annuity Plan For
Craft Employees of The New York Times Companies (the “RAP”) were merged into The New York Times Companies
Pension Plan.
We also have a foreign-based pension plan for certain employees (the “foreign plan”). The information for the
foreign plan is combined with the information for U.S. non-qualified plans. The benefit obligation of the foreign plan
is immaterial to our total benefit obligation.
Net Periodic Pension Cost
The components of net periodic pension cost were as follows:
(In thousands)
Service cost
Interest cost
December 30, 2018
December 31, 2017
December 25, 2016
Qualified
Plans
Non-
Qualified
Plans
All
Plans
Qualified
Plans
Non-
Qualified
Plans
All
Plans
Qualified
Plans
Non-
Qualified
Plans
All
Plans
$
9,986 $
79 $ 10,065
$
9,720 $
79 $
9,799
$
8,991 $
143 $
9,134
52,770
7,383
60,153
60,742
7,840
68,582
66,293
8,172
74,465
Expected return on plan assets
(82,327)
— (82,327)
(102,900)
— (102,900)
(111,159)
— (111,159)
Amortization and other costs
26,802
5,114
31,916
29,051
4,318
33,369
28,274
4,184
32,458
Amortization of prior service
credit
(1,945)
—
(1,945)
(1,945)
—
(1,945)
(1,945)
—
(1,945)
Effect of settlement/curtailment
—
221
221
102,109
— 102,109
21,294
(1,599)
19,695
Net periodic pension cost
$
5,286 $ 12,797 $ 18,083
$ 96,777 $ 12,237 $ 109,014
$ 11,748 $ 10,900 $ 22,648
As a result of the adoption of ASU 2017-07 during the first quarter of 2018, the service cost component of net
periodic pension cost continues to be recognized in “Total operating costs” while the other components have been
reclassified to “Other components of net periodic benefit costs” in our Consolidated Statements of Operations below
“Operating profit” on a retrospective basis.
P. 88 – THE NEW YORK TIMES COMPANY
Over the past several years the Company has taken steps to reduce the size and volatility of our pension
obligations. In the first quarter of 2018, the Company signed an agreement that froze the accrual of benefits under the
RAP with respect to all participants covered by a collective bargaining agreement between the Company and
The Newspaper and Mail Deliverers’ Union of New York and Vicinity. This group of participants was the last group
under the RAP to have their benefit accruals frozen.
In the fourth quarter of 2017, the Company entered into agreements with two insurance companies to transfer
future benefit obligations and annuity administration for certain retirees (or their beneficiaries) in two of the
Company’s qualified pension plans. This transfer of plan assets and obligations reduced the Company’s qualified
pension plan obligations by $263.3 million. As a result of these agreements, the Company recorded pension
settlement charges of $102.1 million. Additionally, during the fourth quarter of 2017, the Company made
discretionary contributions totaling $120 million to certain qualified pension plans.
In the fourth quarter of 2016, we recorded a pension settlement charge of $21.3 million in connection with a
lump-sum payment offer made to certain former employees who participated in certain qualified pension plans.
These lump-sum payments totaled $49.5 million and were made with cash from the qualified pension plans, not with
Company cash. The effect of this lump-sum settlement was to reduce our pension obligations by $52.2 million. In
addition, we recorded a $1.7 million curtailment related to the streamlining of the Company’s international print
operations. See Note 8 for more information on the streamlining of the Company’s international print operations.
Other changes in plan assets and benefit obligations recognized in other comprehensive income/loss were as
follows:
(In thousands)
Net actuarial loss/(gain)
Amortization of loss
Amortization of prior service credit
Effect of settlement
Total recognized in other comprehensive (income)/loss
Net periodic pension cost
December 30,
2018
December 31,
2017
December 25,
2016
$
29,965
$
22,600
$
(4,289)
(31,916)
(33,369)
(32,458)
1,945
(421)
(427)
1,945
1,945
(102,109)
(21,294)
(110,933)
(56,096)
18,083
109,014
22,648
Total recognized in net periodic benefit cost and other comprehensive (income)/
loss
$
17,656
$
(1,919)
$
(33,448)
Actuarial gains and losses are amortized using a corridor approach. The gain or loss corridor is equal to 10% of
the greater of the projected benefit obligation and the market-related value of assets. Gains and losses in excess of the
corridor are generally amortized over the future working lifetime for the ongoing plans and average life expectancy
for the frozen plans.
The estimated actuarial loss and prior service credit that will be amortized from accumulated other
comprehensive loss into net periodic pension cost over the next fiscal year is approximately $23 million and $2
million, respectively.
We also contribute to defined contribution benefit plans. The amount of cost recognized for defined
contribution benefit plans was approximately $22 million, $23 million and $15 million for 2018, 2017 and 2016,
respectively.
THE NEW YORK TIMES COMPANY – P. 89
Benefit Obligation and Plan Assets
The changes in the benefit obligation and plan assets and other amounts recognized in other comprehensive
loss were as follows:
(In thousands)
Change in benefit obligation
December 30, 2018
December 31, 2017
Qualified
Plans
Non-
Qualified
Plans
All Plans
Qualified
Plans
Non-
Qualified
Plans
All Plans
Benefit obligation at beginning of year
$ 1,636,488
$ 245,302
$ 1,881,790
$ 1,798,652
$
240,399
$ 2,039,051
Service cost
Interest cost
9,986
79
10,065
9,720
79
9,799
52,770
7,383
60,153
60,742
7,840
68,582
Plan participants’ contributions
3
—
3
9
—
9
Actuarial (gain)/loss
(123,670)
(10,221)
(133,891)
142,980
15,342
158,322
Curtailments
Settlements
Benefits paid
—
—
(200)
—
(200)
—
—
(269,287)
—
—
—
(269,287)
(84,179)
(19,219)
(103,398)
(106,328)
(18,510)
(124,838)
Effects of change in currency conversion
—
(58)
(58)
—
152
152
Benefit obligation at end of year
1,491,398
223,066
1,714,464
1,636,488
245,302
1,881,790
Change in plan assets
Fair value of plan assets at beginning of year
1,567,411
Actual return on plan assets
(81,529)
—
—
1,567,411
1,576,760
(81,529)
238,622
—
—
1,576,760
238,622
Employer contributions
8,445
19,219
27,664
127,635
18,510
146,145
Plan participants’ contributions
Settlements
Benefits paid
3
—
—
—
3
—
9
(269,287)
—
—
9
(269,287)
(84,179)
(19,219)
(103,398)
(106,328)
(18,510)
(124,838)
Fair value of plan assets at end of year
1,410,151
—
1,410,151
1,567,411
—
1,567,411
Net amount recognized
$
(81,247)
$ (223,066)
$ (304,313)
$
(69,077)
$ (245,302)
$ (314,379)
Amount recognized in the Consolidated Balance Sheets
Current liabilities
Noncurrent liabilities
$
— $
(17,034)
$
(17,034)
$
— $
(16,901)
$
(16,901)
(81,247)
(206,032)
(287,279)
(69,077)
(228,401)
(297,478)
Net amount recognized
$
(81,247)
$ (223,066)
$ (304,313)
$
(69,077)
$ (245,302)
$ (314,379)
Amount recognized in accumulated other comprehensive loss
Actuarial loss
Prior service credit
Total
$
654,579
$
94,123
$ 748,702
$ 641,194
$
109,880
$
751,074
(18,786)
—
(18,786)
(20,731)
—
(20,731)
$
635,793
$
94,123
$ 729,916
$ 620,463
$
109,880
$
730,343
P. 90 – THE NEW YORK TIMES COMPANY
Information for pension plans with an accumulated benefit obligation in excess of plan assets was as follows:
(In thousands)
Projected benefit obligation
Accumulated benefit obligation
Fair value of plan assets
Assumptions
December 30,
2018
December 31,
2017
$
$
$
1,714,464
1,712,619
1,410,151
$
$
$
1,881,790
1,874,445
1,567,411
Weighted-average assumptions used in the actuarial computations to determine benefit obligations for
qualified pension plans were as follows:
Discount rate
Rate of increase in compensation levels
December 30,
2018
December 31,
2017
4.43%
3.00%
3.75%
2.95%
The rate of increase in compensation levels is applicable only for the Guild-Times Adjustable Pension Plan that
has not been frozen.
Weighted-average assumptions used in the actuarial computations to determine net periodic pension cost for
qualified plans were as follows:
Discount rate for determining projected benefit obligation
Discount rate in effect for determining service cost
Discount rate in effect for determining interest cost
Rate of increase in compensation levels
Expected long-term rate of return on assets
December 30,
2018
December 31,
2017
December 25,
2016
3.75%
3.88%
3.31%
2.95%
5.69%
4.31%
4.74%
3.54%
2.95%
6.73%
4.60%
5.78%
3.68%
2.91%
7.01%
Weighted-average assumptions used in the actuarial computations to determine benefit obligations for non-
qualified plans were as follows:
Discount rate
Rate of increase in compensation levels
December 30,
2018
December 31,
2017
4.35%
2.50%
3.67%
2.50%
The rate of increase in compensation levels is applicable only for the foreign plan, which has not been frozen.
THE NEW YORK TIMES COMPANY – P. 91
Weighted-average assumptions used in the actuarial computations to determine net periodic pension cost for
non-qualified plans were as follows:
Discount rate for determining projected benefit obligation
Discount rate in effect for determining interest cost
Rate of increase in compensation levels
December 30,
2018
December 31,
2017
December 25,
2016
3.67%
3.14%
2.50%
4.17%
3.39%
2.50%
4.40%
3.44%
2.50%
We determined our discount rate using a Ryan ALM, Inc. Curve (the “Ryan Curve”). The Ryan Curve provides
the bonds included in the curve and allows adjustments for certain outliers (i.e., bonds on “watch”). We believe the
Ryan Curve allows us to calculate an appropriate discount rate.
To determine our discount rate, we project a cash flow based on annual accrued benefits. The projected plan
cash flow is discounted to the measurement date, which is the last day of our fiscal year, using the annual spot rates
provided in the Ryan Curve.
In determining the expected long-term rate of return on assets, we evaluated input from our investment
consultants, actuaries and investment management firms, including our review of asset class return expectations, as
well as long-term historical asset class returns. Projected returns by such consultants and economists are based on
broad equity and bond indices. Our objective is to select an average rate of earnings expected on existing plan assets
and expected contributions to the plan during the year, less expense expected to be incurred by the plan during the
year.
The market-related value of plan assets is multiplied by the expected long-term rate of return on assets to
compute the expected return on plan assets, a component of net periodic pension cost. The market-related value of
plan assets is a calculated value that recognizes changes in fair value over three years.
Plan Assets
Company-Sponsored Pension Plans
The assets underlying the Company-sponsored qualified pension plans are managed by professional
investment managers. These investment managers are selected and monitored by the pension investment committee,
composed of certain senior executives, who are appointed by the Finance Committee of the Board of Directors of the
Company. The Finance Committee is responsible for adopting our investment policy, which includes rules regarding
the selection and retention of qualified advisors and investment managers. The pension investment committee is
responsible for implementing and monitoring compliance with our investment policy, selecting and monitoring
investment managers and communicating the investment guidelines and performance objectives to the investment
managers.
Our contributions are made on a basis determined by the actuaries in accordance with the funding
requirements and limitations of the Employee Retirement Income Security Act (“ERISA”) and the Internal Revenue
Code.
Investment Policy and Strategy
The primary long-term investment objective is to allocate assets in a manner that produces a total rate of return
that meets or exceeds the growth of our pension liabilities. An additional investment objective is to transition the asset
mix to hedge liabilities and minimize volatility in the funded status of the plans.
Asset Allocation Guidelines
In accordance with our asset allocation strategy, for substantially all of our Company-sponsored pension plan
assets, investments are categorized into long duration fixed income investments whose value is highly correlated to
that of the pension plan obligations (“Long Duration Assets”) or other investments, such as equities and high-yield
fixed income securities, whose return over time is expected to exceed the rate of growth in our pension plan
obligations (“Return-Seeking Assets”).
P. 92 – THE NEW YORK TIMES COMPANY
The proportional allocation of assets between Long Duration Assets and Return-Seeking Assets is dependent on
the funded status of each pension plan. Under our policy, for example, a funded status at 100% requires an allocation
of total assets of 71.5% to 76.5% to Long Duration Assets and 23.5% to 28.5% to Return-Seeking Assets. As a plan's
funded status increases, the allocation to Long Duration Assets will increase and the allocation to Return-Seeking
Assets will decrease.
The following asset allocation guidelines apply to the Return-Seeking Assets:
Asset Category
Public Equity
High-Yield Fixed Income
Alternatives
Cash
Percentage
Range
Actual
70% - 100%
0% -
15%
0% -
15%
0% -
10%
85%
0%
15%
0%
The asset allocations by asset category for both Long Duration and Return-Seeking Assets, as of December 30,
2018, were as follows:
Asset Category
Long Duration Fixed Income
Public Equity
High-Yield Fixed Income
Alternatives
Cash
Percentage
Range
Actual
71.5% - 76.5%
16.5% - 28.5%
0% -
0% -
0% -
4%
4%
3%
75%
21%
0%
3%
1%
The specified target allocation of assets and ranges set forth above are maintained and reviewed on a periodic
basis by the pension investment committee. The pension investment committee may direct the transfer of assets
between investment managers in order to rebalance the portfolio in accordance with approved asset allocation ranges
to accomplish the investment objectives for the pension plan assets.
THE NEW YORK TIMES COMPANY – P. 93
Fair Value of Plan Assets
The fair value of the assets underlying our Company-sponsored qualified pension plans and the joint-
sponsored Guild-Times Adjustable Pension Plan by asset category are as follows:
Quoted Prices
Markets for
Identical Assets
Significant
Observable
Inputs
Significant
Unobservable
Inputs
Investment
Measured at Net
Asset Value(3)
December 30, 2018
(Level 1)
(Level 2)
(Level 3)
Total
(In thousands)
Asset Category
Equity Securities:
U.S. Equities
$
25,459
$
— $
— $
— $
International Equities
Mutual Funds
Registered Investment
Companies
Common/Collective Funds(1)
Fixed Income Securities:
Corporate Bonds
U.S. Treasury and Other
Government Securities
Group Annuity Contract
Municipal and Provincial
Bonds
Government Sponsored
Enterprises(2)
Other
Cash and Cash Equivalents
Private Equity
Hedge Fund
27,805
18,891
36,908
—
—
—
—
—
—
—
—
—
—
—
—
—
—
532,466
155,229
—
42,170
14,278
13,754
—
—
—
Assets at Fair Value
109,063
757,897
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
25,459
27,805
18,891
36,908
412,815
412,815
—
—
64,559
—
—
—
19,667
12,752
33,398
532,466
155,229
64,559
42,170
14,278
13,754
19,667
12,752
33,398
543,191
1,410,151
—
Other Assets
Total
$
109,063
$
757,897
$
— $
543,191
$
1,410,151
(1) The underlying assets of the common/collective funds are primarily comprised of equity and fixed income securities. The fair value in the above
table represents our ownership share of the NAV of the underlying funds.
(2) Represents investments that are not backed by the full faith and credit of the U.S. government.
(3) Certain investments that are measured at fair value using the NAV per share (or its equivalent) have not been classified in the fair value
hierarchy.
P. 94 – THE NEW YORK TIMES COMPANY
Fair Value Measurement at December 31, 2017
Quoted Prices
Markets for
Identical Assets
Significant
Observable
Inputs
Significant
Unobservable
Inputs
Investment
Measured at Net
Asset Value(3)
(Level 1)
(Level 2)
(Level 3)
Total
(In thousands)
Asset Category
Equity Securities:
U.S. Equities
$
65,466
$
— $
— $
— $
International Equities
Mutual Funds
Registered Investment Companies
62,256
44,173
42,868
Common/Collective Funds(1)
Fixed Income Securities:
Corporate Bonds
U.S. Treasury and Other
Government Securities
Group Annuity Contract
Municipal and Provincial Bonds
Government Sponsored
Enterprises(2)
Other
Cash and Cash Equivalents
Private Equity
Hedge Fund
—
—
—
—
—
—
—
—
—
—
—
—
—
—
416,201
144,085
—
36,674
11,364
10,883
—
—
—
Assets at Fair Value
214,763
619,207
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
65,466
62,256
44,173
42,868
601,896
601,896
—
—
45,005
—
—
—
32,352
20,289
33,899
416,201
144,085
45,005
36,674
11,364
10,883
32,352
20,289
33,899
733,441
1,567,411
—
Other Assets
Total
$
214,763
$
619,207
$
— $
733,441
$
1,567,411
(1) The underlying assets of the common/collective funds are primarily comprised of equity and fixed income securities. The fair value in the above
table represents our ownership share of the NAV of the underlying funds.
(2) Represents investments that are not backed by the full faith and credit of the U.S. government.
(3) Certain investments that are measured at fair value using the NAV per share (or its equivalent) have not been classified in the fair value
hierarchy.
Level 1 and Level 2 Investments
Where quoted prices are available in an active market for identical assets, such as equity securities traded on an
exchange, transactions for the asset occur with such frequency that the pricing information is available on an
ongoing/daily basis. We classify these types of investments as Level 1 where the fair value represents the closing/last
trade price for these particular securities.
For our investments where pricing data may not be readily available, fair values are estimated by using quoted
prices for similar assets, in both active and not active markets, and observable inputs, other than quoted prices, such
as interest rates and credit risk. We classify these types of investments as Level 2 because we are able to reasonably
estimate the fair value through inputs that are observable, either directly or indirectly. There are no restrictions on our
ability to sell any of our Level 1 and Level 2 investments.
THE NEW YORK TIMES COMPANY – P. 95
Cash Flows
In 2018, we made contributions to the Guild-Times Adjustable Pension Plan of $8.4 million. We expect
contributions made to satisfy minimum funding requirements to total approximately $9 million in 2019.
The following benefit payments, which reflect future service for plans that have not been frozen, are expected to
be paid:
(In thousands)
2019
2020
2021
2022
2023
2024-2028(1)
Plans
Qualified
Non-
Qualified
Total
$
86,901
$
17,368
$
104,269
88,041
89,678
91,557
92,962
480,374
17,107
16,909
16,726
16,423
77,975
105,148
106,587
108,283
109,385
558,349
(1) While benefit payments under these plans are expected to continue beyond 2028 we have presented in this table only those benefit payments
estimated over the next 10 years.
Multiemployer Plans
We contribute to a number of multiemployer defined benefit pension plans under the terms of various
collective bargaining agreements that cover our union-represented employees. In recent years, certain events, such as
amendments to various collective bargaining agreements and the sale of the New England Media Group, resulted in
withdrawals from multiemployer pension plans. These actions, along with a reduction in covered employees, have
resulted in us estimating withdrawal liabilities to the respective plans for our proportionate share of any unfunded
vested benefits. In 2016, we recorded $6.7 million in charges for partial withdrawal obligations under multiemployer
pension plans. There was no such charge in 2017. During the third quarter of 2018, we recorded a gain of $4.9
million from a pension liability adjustment, which was recorded in “Multiemployer pension and other contractual
(gain)/loss” in our Consolidated Statements of Operations.
Our multiemployer pension plan withdrawal liability was approximately $97 million as of December 30, 2018
and approximately $108 million as of December 31, 2017. This liability represents the present value of the obligations
related to complete and partial withdrawals that have already occurred as well as an estimate of future partial
withdrawals that we considered probable and reasonably estimable. For those plans that have yet to provide us with
a demand letter, the actual liability will not be fully known until they complete a final assessment of the withdrawal
liability and issue a demand to us. Therefore, the estimate of our multiemployer pension plan liability will be adjusted
as more information becomes available that allows us to refine our estimates.
The risks of participating in multiemployer plans are different from single-employer plans in the following
aspects:
• Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees
of other participating employers.
•
•
•
If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne
by the remaining participating employers.
If we elect to withdraw from these plans or if we trigger a partial withdrawal due to declines in contribution
base units or a partial cessation of our obligation to contribute, we may be assessed a withdrawal liability
based on a calculated share of the underfunded status of the plan.
If a multiemployer plan from which we have withdrawn subsequently experiences a mass withdrawal, we
may be required to make additional contributions under applicable law.
P. 96 – THE NEW YORK TIMES COMPANY
Our participation in significant plans for the fiscal period ended December 30, 2018, is outlined in the table
below. The “EIN/Pension Plan Number” column provides the Employer Identification Number (“EIN”) and the
three-digit plan number. The zone status is based on the latest information that we received from the plan and is
certified by the plan’s actuary. A plan is generally classified in critical status if a funding deficiency is projected within
four years or five years, depending on other criteria. A plan in critical status is classified in critical and declining
status if it is projected to become insolvent in the next 15 or 20 years, depending on other criteria. A plan is classified
in endangered status if its funded percentage is less than 80% or a funding deficiency is projected within seven years.
If the plan satisfies both of these triggers, it is classified in seriously endangered status. A plan not classified in any
other status is classified in the green zone. The “FIP/RP Status Pending/Implemented” column indicates plans for
which a financial improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been
implemented. The “Surcharge Imposed” column includes plans in a red zone status that are required to pay a
surcharge in excess of regular contributions. The last column lists the expiration date(s) of the collective bargaining
agreement(s) to which the plans are subject.
Pension Fund
EIN/Pension
Plan Number
2018
2017
FIP/RP Status
Pending/
Implemented
2018
2017
2016
Surcharge
Imposed
Pension Protection Act
Zone Status
(In thousands)
Contributions of the
Company
Collective
Bargaining
Agreement
Expiration
Date
CWA/ITU Negotiated
Pension Plan
Newspaper and Mail
Deliverers’-Publishers’
Pension Fund(2)
Critical and
Declining
as of
1/01/18
Critical and
Declining
as of
1/01/17
13-6212879-001
13-6122251-001
Green as of
6/01/18
Green as of
6/01/17
GCIU-Employer
Retirement Benefit
Plan
91-6024903-001
Critical and
Declining
as of
1/01/18
Critical and
Declining
as of
1/01/17
Pressmen’s Publishers’
Pension Fund(4)
13-6121627-001
Green as of
4/01/18
Green as of
4/01/17
Paper-Handlers’-
Publishers’ Pension
Fund(5)
13-6104795-001
Critical and
Declining
as of
4/01/18
Critical and
Declining
as of
4/01/17
Implemented
$
408 $
425 $
486
No
(1)
N/A
992
995
1,040
No
3/30/2020
Implemented
42
39
43
Yes
3/30/2021(3)
N/A
1,129
963
1,001
No
3/30/2021
Implemented
99
88
100
Yes
3/30/2021
Contributions for individually significant plans
Total Contributions
$ 2,670 $ 2,510 $ 2,670
$ 2,670 $ 2,510 $ 2,670
(1) There are two collective bargaining agreements requiring contributions to this plan: Mailers, which expires March 30, 2019, and Typographers,
which expires March 30, 2020.
(2) Elections under the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010: Extended Amortization of Net
Investment Losses (IRS Section 431(b)(8)(A)) and the Expanded Smoothing Period (IRS Section 431(b)(8)(B)).
(3) We previously had two collective bargaining agreements requiring contributions to this plan. As of December 30, 2018, only one collective
bargaining agreement remained for the Stereotypers. The method for calculating actuarial value of assets was changed retroactive to January 1,
2009, as elected by the Board of Trustees and as permitted by IRS Notice 2010-83. This election includes smoothing 2008 investment losses
over ten years.
(4) The Plan sponsor elected two provisions of funding relief under the Preservation of Access to Care for Medicare Beneficiaries and Pension
Relief Act of 2010 (PRA 2010) to more slowly absorb the 2008 plan year investment loss, retroactively effective as of April 1, 2009. These
included extended amortization under the prospective method and 10-year smoothing of the asset loss for the plan year beginning April 1, 2008.
(5) Board of Trustees elected funding relief. This election includes smoothing the March 31, 2009 investment losses over 10 years.
The rehabilitation plan for the GCIU-Employer Retirement Benefit Plan includes minimum annual
contributions no less than the total annual contribution made by us from September 1, 2008 through August 31, 2009.
THE NEW YORK TIMES COMPANY – P. 97
The Company was listed in the plans’ respective Forms 5500 as providing more than 5% of the total
contributions for the following plans and plan years:
Pension Fund
CWA/ITU Negotiated Pension Plan
Newspaper and Mail Deliverers’-Publishers’ Pension Fund
Pressmen’s Publisher’s Pension Fund
Paper-Handlers’-Publishers’ Pension Fund
Year Contributions to Plan Exceeded More Than 5 Percent of
Total Contributions (as of Plan’s Year-End)
12/31/2017 & 12/31/2016(1)
5/31/2017 & 5/31/2016(1)
3/31/2018 & 3/31/2017
3/31/2018 & 3/31/2017
(1) Forms 5500 for the plans’ year ended 12/31/18 and 5/31/18 were not available as of the date we filed our financial statements.
The Company received a notice and demand for payment of withdrawal liability from the Newspaper and Mail
Deliverers’-Publishers’ Pension Fund in September 2013 and December 2014 associated with partial withdrawals. See
Note 19 for further information.
11. Other Postretirement Benefits
We provide health benefits to retired employees (and their eligible dependents) who meet the definition of an
eligible participant and certain age and service requirements, as outlined in the plan document. While we offer pre-
age 65 retiree medical coverage to employees who meet certain retiree medical eligibility requirements, we do not
provide post-age 65 retiree medical benefits for employees who retired on or after March 1, 2009. We accrue the costs
of postretirement benefits during the employees’ active years of service and our policy is to pay our portion of
insurance premiums and claims from general corporate assets.
Net Periodic Other Postretirement Benefit Cost/(Income)
The components of net periodic postretirement benefit cost/(income) were as follows:
(In thousands)
Service cost
Interest cost
Amortization and other costs
Amortization of prior service credit
Effect of settlement/curtailment(1)
December 30,
2018
December 31,
2017
December 25,
2016
$
21
$
367
$
1,476
4,735
(6,157)
—
1,881
3,621
(7,755)
(32,737)
417
1,979
4,105
(8,440)
—
Net periodic postretirement benefit cost/(income)
$
75
$
(34,623)
$
(1,939)
(1) In the fourth quarter of 2017, the Company recorded a gain in connection with the settlement of a funding obligation related to a postretirement
plan.
As a result of the adoption of ASU 2017-07 during the first quarter of 2018, the service cost component of net
periodic postretirement benefit cost/(income) continues to be recognized in “Total operating costs” while the other
components have been reclassified to “Other components of net periodic benefit costs” in our Consolidated
Statements of Operations below “Operating profit” on a retrospective basis.
P. 98 – THE NEW YORK TIMES COMPANY
The changes in the benefit obligations recognized in other comprehensive (income)/loss were as follows:
(In thousands)
Net actuarial loss/(gain)
Amortization of loss
Amortization of prior service credit
Effect of curtailment
Effect of settlement
Total recognized in other comprehensive (income)/loss
December 30,
2018
December 31,
2017
December 25,
2016
$
(4,905)
$
(6,625)
$
28
(4,735)
6,157
—
—
(3,483)
(3,621)
7,755
6,502
26,235
30,246
(4,105)
8,440
—
—
4,363
(1,939)
Net periodic postretirement benefit cost/(income)
75
(34,623)
Total recognized in net periodic postretirement benefit cost/(income) and other
comprehensive (income)/loss
$
(3,408)
$
(4,377)
$
2,424
Actuarial gains and losses are amortized using a corridor approach. The gain or loss corridor is equal to 10% of
the accumulated postretirement benefit obligation. Gains and losses in excess of the corridor are generally amortized
over the average remaining service period to expected retirement of active participants.
The estimated actuarial loss and prior service credit that will be amortized from accumulated other
comprehensive loss into net periodic benefit cost over the next fiscal year is approximately $3 million and $5 million,
respectively.
In connection with collective bargaining agreements, we contribute to several multiemployer welfare plans.
These plans provide medical benefits to active and retired employees covered under the respective collective
bargaining agreement. Contributions are made in accordance with the formula in the relevant agreement.
Postretirement costs related to these plans are not reflected above and were approximately $16 million in 2018, $15
million in 2017 and $15 million in 2016.
THE NEW YORK TIMES COMPANY – P. 99
The changes in the benefit obligation and plan assets and other amounts recognized in other comprehensive
income/loss were as follows:
(In thousands)
Change in benefit obligation
December 30,
2018
December 31,
2017
Benefit obligation at beginning of year
$
54,642
$
65,042
Service cost
Interest cost
Plan participants’ contributions
Actuarial (gain)/loss
Curtailments/settlements
Benefits paid
Benefit obligation at the end of year
Change in plan assets
Fair value of plan assets at beginning of year
Employer contributions
Plan participants’ contributions
Benefits paid
Fair value of plan assets at end of year
Net amount recognized
Amount recognized in the Consolidated Balance Sheets
Current liabilities
Noncurrent liabilities
Net amount recognized
Amount recognized in accumulated other comprehensive loss
Actuarial loss
Prior service credit
Total
21
1,476
3,974
(4,905)
367
1,881
4,007
3,703
—
(10,328)
(9,171)
(10,030)
46,037
54,642
—
5,197
3,974
—
6,023
4,007
(9,171)
(10,030)
—
—
(46,037)
$
(54,642)
(5,645)
$
(5,826)
(40,392)
(48,816)
(46,037)
$
(54,642)
28,871
$
38,512
(12,456)
(18,613)
16,415
$
19,899
$
$
$
$
$
Weighted-average assumptions used in the actuarial computations to determine the postretirement benefit
obligations were as follows:
Discount rate
Estimated increase in compensation level
December 30,
2018
December 31,
2017
4.18%
3.50%
3.46%
3.50%
P. 100 – THE NEW YORK TIMES COMPANY
Weighted-average assumptions used in the actuarial computations to determine net periodic postretirement
cost were as follows:
Discount rate for determining projected benefit obligation
Discount rate in effect for determining service cost
Discount rate in effect for determining interest cost
Estimated increase in compensation level
The assumed health-care cost trend rates were as follows:
Health-care cost trend rate
Rate to which the cost trend rate is assumed to decline (ultimate trend rate)
Year that the rate reaches the ultimate trend rate
December 30,
2018
December 31,
2017
December 25,
2016
3.46%
3.56%
3.01%
3.50%
3.93%
4.08%
3.21%
3.50%
4.05%
4.24%
2.96%
3.50%
December 30,
2018
December 31,
2017
6.90%
5.00%
2025
7.60%
5.00%
2025
Because our health-care plans are capped for most participants, the assumed health-care cost trend rates do not
have a significant effect on the amounts reported for the health-care plans. A one-percentage point change in assumed
health-care cost trend rates would have the following effects:
(In thousands)
Effect on total service and interest cost for 2018
Effect on accumulated postretirement benefit obligation as of December 30, 2018
One-Percentage Point
Increase
Decrease
$
$
40
1,139
$
$
(36)
(1,021)
The following benefit payments (net of plan participant contributions) under our Company’s postretirement
plans, which reflect expected future services, are expected to be paid:
(In thousands)
2019
2020
2021
2022
2023
2024-2028(1)
$
Amount
5,802
5,394
4,962
4,545
4,196
16,662
(1) While benefit payments under these plans are expected to continue beyond 2028, we have presented in this table only those benefit
payments estimated over the next 10 years.
We accrue the cost of certain benefits provided to former or inactive employees after employment, but before
retirement. The cost is recognized only when it is probable and can be estimated. Benefits include life insurance,
disability benefits and health-care continuation coverage. The accrued obligation for these benefits was $9.7 million as
of December 30, 2018, and $11.3 million as of December 31, 2017.
THE NEW YORK TIMES COMPANY – P. 101
12. Other Liabilities
The components of the “Other Liabilities — Other” balance in our Consolidated Balance Sheets were as follows:
(In thousands)
Deferred compensation
Other liabilities
Total
December 30,
2018
December 31,
2017
$
$
23,211
$
29,526
54,636
52,787
77,847
$
82,313
Deferred compensation consists primarily of deferrals under our DEC. Refer to Note 9 for detail.
We invest deferred compensation in life insurance products designed to closely mirror the performance of the
investment funds that the participants select. Our investments in life insurance products are included in
“Miscellaneous assets” in our Consolidated Balance Sheets, and were $38.1 million as of December 30, 2018, and $40.3
million as of December 31, 2017.
Other liabilities in the preceding table primarily included our post employment liabilities, our contingent tax
liability for uncertain tax positions and self-insurance liabilities as of December 30, 2018, and December 31, 2017.
13. Income Taxes
Reconciliations between the effective tax rate on income from continuing operations before income taxes and
the federal statutory rate are presented below.
Effect of enacted changes in tax laws
(1,872)
(1.0)
68,747
December 30, 2018
December 31, 2017
December 25, 2016
Amount
% of
Pre-tax
Amount
% of
Pre-tax
Amount
% of
Pre-tax
$ 36,979
21.0
$ 38,928
35.0
$ 10,685
12,335
7.0
4,800
2,288
449
2,399
—
—
1.3
0.2
1.3
—
—
(2,277)
(1,916)
1,021
—
458
(4,534)
(14.9)
4.3
61.8
(2.0)
(1.7)
0.9
—
0.4
3,095
—
(736)
1,115
(1,820)
(2,418)
35.0
10.1
—
(2.4)
3.7
(6.0)
(7.9)
(3.2)
(3,947)
(2.2)
(5,805)
(5.2)
(966)
$ 48,631
27.6
$ 103,956
93.5
$
4,421
14.4
(In thousands)
Tax at federal statutory rate
State and local taxes, net
Increase/(decrease) in uncertain tax positions
Loss/(gain) on Company-owned life insurance
Nondeductible expense
Domestic manufacturing deduction
Foreign Earnings and Dividends
Other, net
Income tax expense
P. 102 – THE NEW YORK TIMES COMPANY
The components of income tax expense as shown in our Consolidated Statements of Operations were as
follows:
(In thousands)
Current tax expense/(benefit)
Federal
Foreign
State and local
Total current tax expense
Deferred tax expense
Federal
State and local
Total deferred tax expense/(benefit)
Income tax expense/(benefit)
December 30,
2018
December 31,
2017
December 25,
2016
$
31,719
$
(252)
$
22,864
705
10,172
42,596
913
5,122
6,035
458
350
556
312
(3,295)
19,881
105,905
(16,625)
(2,505)
1,165
103,400
(15,460)
$
48,631
$
103,956
$
4,421
State tax operating loss carryforwards totaled $2.0 million as of December 30, 2018 and $4.7 million as of
December 31, 2017. Such loss carryforwards expire in accordance with provisions of applicable tax laws and have
remaining lives up to 19 years.
On December 22, 2017, the Tax Act was signed into law making significant changes to the Internal Revenue
Code. Changes included, but were not limited to, a federal corporate tax rate decrease from 35% to 21% for tax years
beginning after December 31, 2017, a one-time transition tax on the mandatory deemed repatriation of foreign
earnings and numerous domestic and international-related provisions effective in 2018.
On December 22, 2017, SAB 118 was issued to address the application of GAAP in situations when a registrant
does not have the necessary information available, prepared, or analyzed (including computations) in reasonable
detail to complete the accounting for certain income tax effects of the Tax Act. In accordance with SAB 118, we
determined that the $68.7 million of additional income tax expense recorded in the fourth quarter of 2017 in
connection with the remeasurement of certain deferred tax assets and liabilities, the one-time transition tax on the
mandatory deemed repatriation of foreign earnings, and deferred tax assets related to executive compensation
deductions was a provisional amount and a reasonable estimate at December 31, 2017. Provisional estimates were also
made with regard to the Company’s deductions under the Tax Act’s new expensing provisions and state and local
income taxes related to foreign earnings subject to the one-time transition tax. The ultimate impact of the Tax Act was
expected to differ from the provisional amount recognized due to, among other things, changes in estimates resulting
from the receipt or calculation of final data, changes in interpretations of the Tax Act, and additional regulatory
guidance that would be issued. In the fourth quarter of 2018, in accordance with SAB 118, we completed the
accounting for the impact of the Tax Act and recognized a $1.9 million tax benefit related to 2017, primarily
attributable to the remeasurement of certain deferred tax assets and liabilities and the repatriation of foreign earnings.
THE NEW YORK TIMES COMPANY – P. 103
The components of the net deferred tax assets and liabilities recognized in our Consolidated Balance Sheets
were as follows:
(In thousands)
Deferred tax assets
December 30,
2018
December 31,
2017
Retirement, postemployment and deferred compensation plans
$
128,926
$
140,657
Accruals for other employee benefits, compensation, insurance and other
Net operating losses
Other
Gross deferred tax assets
Deferred tax liabilities
Property, plant and equipment
Intangible assets
Other
Gross deferred tax liabilities
Net deferred tax asset
$
$
22,722
1,598
23,400
16,883
6,228
31,686
176,646
$
195,454
38,268
$
31,043
7,225
2,722
7,300
4,065
48,215
42,408
$
128,431
$
153,046
We assess whether a valuation allowance should be established against deferred tax assets based on the
consideration of both positive and negative evidence using a “more likely than not” standard. In making such
judgments, significant weight is given to evidence that can be objectively verified. We evaluated our deferred tax
assets for recoverability using a consistent approach that considers our three-year historical cumulative income/
(loss), including an assessment of the degree to which any such losses were due to items that are unusual in nature
(i.e., impairments of nondeductible goodwill and intangible assets).
We had an income tax receivable of $3.7 million as of December 30, 2018, compared with an income tax
receivable of $25.4 million as of December 31, 2017.
Income tax benefits related to the exercise or vesting of equity awards reduced current taxes payable by $4.8
million, $13.7 million and $8.6 million in 2018, 2017 and 2016, respectively.
As of December 30, 2018 and December 31, 2017, “Accumulated other comprehensive loss, net of income taxes”
in our Consolidated Balance Sheets and for the years then ended in our Consolidated Statements of Changes in
Stockholders’ Equity was net of deferred tax assets of approximately $194 million and $196 million, respectively.
A reconciliation of unrecognized tax benefits is as follows:
(In thousands)
Balance at beginning of year
Gross additions to tax positions taken during the current year
Gross additions to tax positions taken during the prior year
Gross reductions to tax positions taken during the prior year
Reductions from lapse of applicable statutes of limitations
December 30,
2018
December 31,
2017
December 25,
2016
$
17,086
$
10,028
$
13,941
680
3,019
(8,607)
(549)
9,009
103
(372)
(1,682)
997
—
(3,042)
(1,868)
Balance at end of year
$
11,629
$
17,086
$
10,028
The total amount of unrecognized tax benefits that would, if recognized, affect the effective income tax rate was
approximately $10 million and $7 million as of December 30, 2018, and December 31, 2017, respectively.
P. 104 – THE NEW YORK TIMES COMPANY
In 2018 , we recorded $2.3 million of income tax expense due to an increase in the Company’s reserve for
uncertain tax positions. In 2017, we recorded a $2.3 million income tax benefit due to a reduction in the Company’s
reserve for uncertain tax positions.
We also recognize accrued interest expense and penalties related to the unrecognized tax benefits within income
tax expense or benefit. The total amount of accrued interest and penalties was approximately $3 million and $2 million
as of December 30, 2018, and December 31, 2017, respectively. The total amount of accrued interest and penalties was
a net charge of $0.7 million in 2018, a net benefit of $0.1 million in 2017 and a net benefit of $0.9 million in 2016.
With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax
examinations by tax authorities for years prior to 2010. Management believes that our accrual for tax liabilities is
adequate for all open audit years. This assessment relies on estimates and assumptions and may involve a series of
complex judgments about future events.
It is reasonably possible that certain income tax examinations may be concluded, or statutes of limitation may
lapse, during the next 12 months, which could result in a decrease in unrecognized tax benefits of $3.0 million that
would, if recognized, impact the effective tax rate.
14. Discontinued Operations
New England Media Group
In the fourth quarter of 2013, we completed the sale of substantially all of the assets and operating liabilities of
the New England Media Group — consisting of The Boston Globe, BostonGlobe.com, Boston.com, the T&G,
Telegram.com and related properties — and our 49% equity interest in Metro Boston, for approximately $70.0 million
in cash, subject to customary adjustments. The net after-tax proceeds from the sale, including a tax benefit, were
approximately $74.0 million. In the fourth quarter of 2016, the Company reached a settlement with respect to
litigation involving NEMG T&G, Inc., a subsidiary of the Company that was a part of New England Media Group. As
a result of the settlement, the Company recorded charges of $0.7 million ($0.4 million after tax) and $3.7 million ($2.3
million after tax) for the fiscal years ended December 31, 2017 and December 25, 2016, respectively. The results of
operations of the New England Media Group have been classified as discontinued operations for all periods
presented.
15. Earnings/(Loss) Per Share
We compute earnings/(loss) per share using a two-class method, an earnings allocation method used when a
company’s capital structure includes either two or more classes of common stock or common stock and participating
securities. This method determines earnings/(loss) per share based on dividends declared on common stock and
participating securities (i.e., distributed earnings), as well as participation rights of participating securities in any
undistributed earnings.
Earnings/(loss) per share is computed using both basic shares and diluted shares. The difference between basic
and diluted shares is that diluted shares include the dilutive effect of the assumed exercise of outstanding securities.
Our stock options, stock-settled long-term performance awards and restricted stock units could have the most
significant impact on diluted shares. The decrease in our basic shares is primarily due to repurchases of the
Company’s Class A Common Stock. The difference between basic and diluted shares of approximately 2.1 million, 2.3
million and 1.7 million as of December 30, 2018, December 31, 2017 and December 25, 2016, respectively, resulted
primarily from the dilutive effect of certain stock options and performance awards.
Securities that could potentially be dilutive are excluded from the computation of diluted earnings per share
when a loss from continuing operations exists or when the exercise price exceeds the market value of our Class A
Common Stock, because their inclusion would result in an anti-dilutive effect on per share amounts.
There were no anti-dilutive stock options excluded from the computation of diluted earnings per share in 2018.
The number of stock options excluded from the computation of diluted earnings per share because they were anti-
dilutive was approximately 2 million in 2017 and 4 million in 2016.
There were no anti-dilutive stock-settled long-term performance awards and restricted stock units excluded
from the computation of diluted earnings per share for the year ended 2018, 2017 and 2016.
THE NEW YORK TIMES COMPANY – P. 105
16. Stock-Based Awards
As of December 30, 2018, the Company was authorized to grant stock-based compensation under its 2010
Incentive Compensation Plan (the “2010 Incentive Plan”), which became effective April 27, 2010, and was amended
and restated effective April 30, 2014. The 2010 Incentive Plan replaced the 1991 Executive Stock Incentive Plan (the
“1991 Incentive Plan”). In addition, through April 30, 2014, the Company maintained its 2004 Non-Employee
Directors’ Stock Incentive Plan (the “2004 Directors’ Plan”).
The Company’s long-term incentive compensation program provides executives the opportunity to earn cash
and shares of Class A Common Stock at the end of three-year performance cycles based in part on the achievement of
financial goals tied to a financial metric and in part on stock price performance relative to companies in the Standard
& Poor’s 500 Stock Index, with the majority of the target award to be settled in the Company’s Class A Common
Stock. In addition, the Company grants time-vested restricted stock units annually to a number of employees. These
are settled in shares of Class A Common Stock.
We have outstanding stock-settled long-term performance awards, restricted stock units and stock options
(together, “Stock-Based Awards”). We recognize stock-based compensation expense for outstanding stock-settled
long-term performance awards, restricted stock units and stock appreciation rights. Stock-based compensation
expense was $13.0 million in 2018, $14.8 million in 2017 and $12.4 million in 2016.
Stock-based compensation expense is recognized over the period from the date of grant to the date when the
award is no longer contingent on the employee providing additional service. Awards under the 1991 Incentive Plan
and 2010 Incentive Plan generally vest over a stated vesting period or, with respect to awards granted prior to
December 28, 2014, upon the retirement of an employee or director, as the case may be.
Each non-employee director of the Company receives an annual grant of restricted stock units under the 2010
Incentive Plan. Restricted stock units are awarded on the date of the annual meeting of stockholders and vest on the
date of the subsequent year’s annual meeting, with the shares to be delivered upon a director’s cessation of
membership on the Board of Directors. Each non-employee director is credited with additional restricted stock units
with a value equal to the amount of all dividends paid on the Company’s Class A Common Stock. The Company’s
directors are considered employees for purposes of stock-based compensation.
Stock Options
The 1991 Incentive Plan provided, and the 2010 Incentive Plan provides, for grants of both incentive and non-
qualified stock options at an exercise price equal to the fair market value (as defined in each plan, respectively) of our
Class A Common Stock on the date of grant. Stock options were generally granted with a 3-year vesting period and a
10-year term and vest in equal annual installments. Due to a change in the Company’s long-term incentive
compensation, no grants of stock options have been made since 2012.
The 2004 Directors’ Plan provided for grants of stock options to non-employee directors at an exercise price
equal to the fair market value (as defined in the 2004 Directors’ Plan) of our Class A Common Stock on the date of
grant. Prior to 2012, stock options were granted with a 1-year vesting period and a 10-year term. No grants of stock
options have been made since 2012. The Company’s directors are considered employees for purposes of stock-based
compensation.
P. 106 – THE NEW YORK TIMES COMPANY
Changes in our Company’s stock options in 2018 were as follows:
(Shares in thousands)
Options
December 30, 2018
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Term
(Years)
Options outstanding at beginning of year
Exercised
Forfeited/Expired
Options outstanding at end of period (1)
Options exercisable at end of period
3,774
$
(2,327)
(59)
1,388
1,388
$
$
15
18
20
9
9
Aggregate
Intrinsic
Value
$(000s)
2
$
17,597
2
2
$
$
18,052
18,052
(1) All outstanding options are vested as of December 30, 2018.
The total intrinsic value for stock options exercised was $12.3 million in 2018, $7.0 million in 2017 and $0.7
million in 2016.
Restricted Stock Units
The 2010 Incentive Plan provides for grants of other stock-based awards, including restricted stock units.
Outstanding stock-settled restricted stock units have been granted with a stated vesting period up to 5 years.
Each restricted stock unit represents our obligation to deliver to the holder one share of Class A Common Stock upon
vesting. The fair value of stock-settled restricted stock units is the average market price on the grant date. Changes in
our Company’s stock-settled restricted stock units in 2018 were as follows:
(Shares in thousands)
Unvested stock-settled restricted stock units at beginning of period
Granted
Vested
Forfeited
Unvested stock-settled restricted stock units at end of period
Unvested stock-settled restricted stock units expected to vest at end of period
December 30, 2018
Restricted
Stock
Units
Weighted
Average
Grant-Date
Fair Value
886
$
319
(510)
(72)
623
587
$
$
15
25
14
18
20
20
The intrinsic value of stock-settled restricted stock units vested was $12.4 million in 2018, $7.9 million in 2017
and $7.3 million in 2016.
Long-Term Incentive Compensation
The 2010 Incentive Plan provides for grants of cash and stock-settled awards to key executives payable at the
end of a multi-year performance period.
Cash-settled awards have been granted with three-year performance periods and are based on the achievement
of specified financial performance measures. Cash-settled awards have been classified as a liability in our
Consolidated Balance Sheets. There were payments of approximately $3 million in 2018, $3 million in 2017 and $4
million in 2016.
Stock-settled awards have been granted with three-year performance periods and are based on relative Total
Shareholder Return (“TSR”), which is calculated at stock appreciation plus deemed reinvested dividends, and another
performance measure. Stock-settled awards are payable in Class A Common Stock and are classified within equity.
THE NEW YORK TIMES COMPANY – P. 107
The fair value of TSR awards is determined at the date of grant using a Monte Carlo simulation model. The fair value
of awards under the other performance measure is determined by the average market price on the grant date.
Unrecognized Compensation Expense
As of December 30, 2018, unrecognized compensation expense related to the unvested portion of our Stock-
Based Awards was approximately $13 million and is expected to be recognized over a weighted-average period of
1.45 years.
Reserved Shares
We generally issue shares for the exercise of stock options and vesting of stock-settled restricted stock units
from unissued reserved shares.
Shares of Class A Common Stock reserved for issuance were as follows:
(Shares in thousands)
Stock options, stock–settled restricted stock units and stock-settled performance
awards
Stock options and stock-settled restricted stock units
Stock-settled performance awards(1)
Outstanding
Available
Employee Stock Purchase Plan(2)
Available
401(k) Company stock match(3)
Available
Total Outstanding
Total Available
December 30,
2018
December 31,
2017
2,165
2,009
4,174
7,404
4,772
2,559
7,331
7,188
6,410
6,410
3,045
4,174
3,045
7,331
16,859
16,643
(1) The number of shares actually earned at the end of the multi-year performance period will vary, based on actual performance, from 0%
to 200% of the target number of performance awards granted. The maximum number of shares that could be issued is included in the
table above.
(2) We have not had an offering under the Employee Stock Purchase Plan since 2010.
(3) Effective 2014, we no longer offer a Company stock match under the Company’s 401(k) plan.
P. 108 – THE NEW YORK TIMES COMPANY
17. Stockholders’ Equity
Shares of our Company’s Class A and Class B Common Stock are entitled to equal participation in the event of
liquidation and in dividend declarations. The Class B Common Stock is convertible at the holders’ option on a share-
for-share basis into Class A Common Stock. Upon conversion, the previously outstanding shares of Class B Common
Stock that were converted are automatically and immediately retired, resulting in a reduction of authorized Class B
Common Stock. As provided for in our Company’s Certificate of Incorporation, the Class A Common Stock has
limited voting rights, including the right to elect 30% of the Board of Directors, and the Class A and Class B Common
Stock have the right to vote together on the reservation of our Company shares for stock options and other stock-
based plans, on the ratification of the selection of a registered public accounting firm and, in certain circumstances, on
acquisitions of the stock or assets of other companies. Otherwise, except as provided by the laws of the State of New
York, all voting power is vested solely and exclusively in the holders of the Class B Common Stock.
There were 803,408 shares as of December 30, 2018, and 803,763 as of December 31, 2017, of Class B Common
Stock issued and outstanding that may be converted into shares of Class A Common Stock.
The Adolph Ochs family trust holds approximately 90% of the Class B Common Stock and, as a result, has the
ability to elect 70% of the Board of Directors and to direct the outcome of any matter that does not require a vote of
the Class A Common Stock.
In early 2015, the Board of Directors authorized up to $101.1 million of repurchases of shares of the Company’s
Class A common stock. As of December 30, 2018, repurchases under this authorization totaled $84.9 million
(excluding commissions) and $16.2 million remained under this authorization. Our Board of Directors has authorized
us to purchase shares from time to time, subject to market conditions and other factors. There is no expiration date
with respect to this authorization.
We may issue preferred stock in one or more series. The Board of Directors is authorized to set the
distinguishing characteristics of each series of preferred stock prior to issuance, including the granting of limited or
full voting rights; however, the consideration received must be at least $100 per share. No shares of preferred stock
were issued or outstanding as of December 30, 2018.
The following table summarizes the changes in AOCI by component as of December 30, 2018:
(In thousands)
Foreign Currency
Translation
Adjustments
Funded Status of
Benefit Plans
Net unrealized
loss on available-
for-sale Securities
Total
Accumulated
Other
Comprehensive
Loss
Balance as of December 31, 2017
$
6,328
$
(427,819) $
(1,538) $
(423,029)
Other comprehensive (loss) before reclassifications,
before tax(1)
Amounts reclassified from accumulated other
comprehensive loss, before tax(1)
Income tax (benefit)/expense(1)
Net current-period other comprehensive (loss)/income,
net of tax
AOCI reclassification to retained earnings(2)
(4,368)
—
(1,141)
(3,227)
1,576
(25,060)
28,970
1,021
2,889
(95,378)
(300)
—
(78)
(222)
(333)
(29,728)
28,970
(198)
(560)
(94,135)
Balance as of December 30, 2018
$
4,677
$
(520,308) $
(2,093) $
(517,724)
(1) All amounts are shown net of noncontrolling interest.
(2) As a result of adopting ASU 2018-02 in the first quarter of 2018, stranded tax effects of $94.1 million were reclassified from AOCI to “Retained
earnings.” See Note 2 for more information.
THE NEW YORK TIMES COMPANY – P. 109
The following table summarizes the reclassifications from AOCI for the period ended December 30, 2018:
(In thousands)
Detail about accumulated other comprehensive loss
components
Amounts reclassified
from accumulated
other comprehensive
loss
Affect line item in the statement
where net income is presented
Funded status of benefit plans:
Amortization of prior service credit(1)
Amortization of actuarial loss(1)
Pension settlement charge
Total reclassification, before tax(2)
Income tax expense
Total reclassification, net of tax
$
$
Other components of net periodic
benefit costs
Other components of net periodic
benefit costs
Other components of net periodic
benefit costs
(8,102)
36,651
421
28,970
7,661
Income tax expense
21,309
(1) These accumulated other comprehensive income components are included in the computation of net periodic benefit cost for pension
and other retirement benefits. See Notes 10 and 11 for additional information.
(2) There were no reclassifications relating to noncontrolling interest for the year ended December 30, 2018.
18. Segment Information
The Company identifies a business as an operating segment if: i) it engages in business activities from which
it may earn revenues and incur expenses; ii) its operating results are regularly reviewed by the Chief Operating
Decision Maker (who is the Company’s President and Chief Executive Officer) to make decisions about resources to
be allocated to the segment and assess its performance; and iii) it has available discrete financial information. The
Company has determined that it has one reportable segment. Therefore, all required segment information can be
found in the Consolidated Financial Statements.
19. Commitments and Contingent Liabilities
Operating Leases
Operating lease commitments are primarily for office space and equipment. Certain office space leases provide
for rent adjustments relating to changes in real estate taxes and other operating costs.
Rental expense was approximately $14 million in 2018, $19 million in 2017, and $16 million in 2016. The
decrease in rental expense in 2018 is a result of fewer costs incurred due to the wind down of the headquarters
redesign and consolidation. The increase in rental expense in 2017 is related to additional costs incurred due to the
headquarter redesign and consolidation. The approximate minimum rental commitments as of December 30, 2018
were as follows:
(In thousands)
2019
2020
2021
2022
2023
Later years
Total minimum lease payments
P. 110 – THE NEW YORK TIMES COMPANY
$
Amount
7,650
6,829
6,106
5,869
5,428
18,110
$
49,992
Capital Leases
Future minimum lease payments for all capital leases, and the present value of the minimum lease payments as
of December 30, 2018, were as follows:
(In thousands)
2019
2020
2021
2022
2023
Later years
Total minimum lease payments
Less: imputed interest
Amount
$
7,245
—
—
—
—
—
7,245
(413)
Present value of net minimum lease payments including current maturities
$
6,832
Restricted Cash
We were required to maintain $18.3 million of restricted cash as of December 30, 2018, and $18.0 million as of
December 31, 2017, the majority of which is set aside to collateralize workers’ compensation obligations.
Newspaper and Mail Deliverers – Publishers’ Pension Fund
In September 2013, the Newspaper and Mail Deliverers-Publishers’ Pension Fund (the “NMDU Fund”)
assessed a partial withdrawal liability against the Company in the gross amount of approximately $26 million for the
plan years ending May 31, 2012, and 2013 (the “Initial Assessment”), an amount that was increased to a gross amount
of approximately $34 million in December 2014, when the NMDU Fund issued a revised partial withdrawal liability
assessment for the plan year ending May 31, 2013 (the “Revised Assessment”). The NMDU Fund claimed that when
City & Suburban Delivery Systems, Inc., a retail and newsstand distribution subsidiary of the Company and the
largest contributor to the NMDU Fund, ceased operations in 2009, it triggered a decline of more than 70% in
contribution base units in each of these two plan years.
The Company disagreed with both the NMDU Fund’s determination that a partial withdrawal occurred and
the methodology by which it calculated the withdrawal liability, and the parties engaged in arbitration proceedings to
resolve the matter. In July 2017, the arbitrator issued a final award and opinion that supported the NMDU Fund’s
determination that a partial withdrawal had occurred, and concluded that the methodology used to calculate the
Initial Assessment was correct. However, the arbitrator also concluded that the NMDU Fund’s calculation of the
Revised Assessment was incorrect. Both the Company and NMDU Fund challenged the arbitrator’s final award and
opinion in federal district court. In March 2018, the court determined that a partial withdrawal had occurred, but
supported the Company’s position that the NMDU Fund’s calculation of the withdrawal liability was improper. The
Company has appealed the court’s decision with respect to the determination that a partial withdrawal had occurred,
and the NMDU Fund has appealed the court’s decision with respect to the calculation of the withdrawal liability.
Due to requirements of the Employee Retirement Income Security Act of 1974 that sponsors make payments
demanded by plans during arbitration and any resultant appeals, the Company had been making payments to the
NMDU Fund since September 2013 relating to the Initial Assessment and February 2015 relating to the Revised
Assessment based on the NMDU Fund’s demand. As a result, as of December 30, 2018, we have paid $18.9 million
relating to the Initial Assessment since the receipt of the initial demand letter. We also paid approximately $5 million
related to the Revised Assessment, which was refunded in July 2016 based on the arbitrator’s ruling. The Company
recognized $0.3 million and $0.4 million of expense for the fiscal year ended December 30, 2018, and December 31,
2017, respectively. The Company recognized $10.7 million of expense (inclusive of a special item of $6.7 million) for
the fiscal year ended December 25, 2016. The Company had a liability of $3.2 million as of December 30, 2018, related
THE NEW YORK TIMES COMPANY – P. 111
to this matter. Management believes it is reasonably possible that the total loss in this matter could exceed the liability
established by a range of zero to approximately $11 million.
NEMG T&G, Inc.
The Company was involved in class action litigation brought on behalf of individuals who, from 2006 to 2011,
delivered newspapers at NEMG T&G, Inc., a subsidiary of the Company (“T&G”). T&G was a part of the New
England Media Group, which the Company sold in 2013. The plaintiffs asserted several claims against T&G,
including a challenge to their classification as independent contractors, and sought unspecified damages. In
December 2016, the Company reached a settlement with respect to the claims, which was approved by the court in
May 2017. As a result of the settlement, the Company recorded charges of $0.7 million ($0.4 million after tax) and $3.7
million ($2.3 million after tax) for the fiscal years ended December 31, 2017 and December 25, 2016, respectively,
within discontinued operations.
Other
We are involved in various legal actions incidental to our business that are now pending against us. These
actions are generally for amounts greatly in excess of the payments, if any, that may be required to be made. Although
the Company cannot predict the outcome of these matters, it is possible that an unfavorable outcome in one or more
matters could be material to the Company’s consolidated results of operations or cash flows for an individual
reporting period. However, based on currently available information, management does not believe that the ultimate
resolution of these matters, individually or in the aggregate, is likely to have a material effect on the Company’s
financial position.
Letter of Credit Commitments
We have issued letters of credit totaling $48.8 million and $56.0 million as of December 30, 2018, and
December 31, 2017, respectively, in connection with the leasing of floors in our headquarters building. The letters of
credit will expire by 2020. Approximately $54 million and $63 million of marketable securities were reserved as
collateral for the letters of credit, as of December 30, 2018, and December 31, 2017, respectively.
20. Subsequent Event
Quarterly Dividend
In February 2019, our Board of Directors approved a dividend of $0.05 per share on our Class A and Class B
common stock. The dividend is payable on April 18, 2019, to all stockholders of record as of the close of business on
April 3, 2019. Our Board of Directors will continue to evaluate the appropriate dividend level on an ongoing basis in
light of our earnings, capital requirements, financial condition and other relevant factors.
P. 112 – THE NEW YORK TIMES COMPANY
SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS
For the Years Ended December 30, 2018, December 31, 2017, and December 25, 2016:
(In thousands)
Accounts receivable allowances:
Year ended December 30, 2018
Year ended December 31, 2017
Year ended December 25, 2016
Valuation allowance for deferred tax assets:
Year ended December 30, 2018
Year ended December 31, 2017
Year ended December 25, 2016
(1) Includes write-offs, net of recoveries.
Balance at
beginning
of period
Additions
charged to
operating
costs and
other
Deductions(1)
Balance at
end of period
$
$
$
$
$
$
14,542
16,815
13,485
$
$
$
11,830
11,747
17,154
$
$
$
13,123
14,020
13,824
$
$
$
13,249
14,542
16,815
— $
— $
— $
— $
— $
— $
36,204
$
— $
36,204
$
—
—
—
THE NEW YORK TIMES COMPANY – P. 113
QUARTERLY INFORMATION (UNAUDITED)
Quarterly financial information for each quarter in the years ended December 30, 2018, and December 31,
2017 is included in the following tables. See Note 14 of the Notes to the Consolidated Financial Statements for
additional information regarding discontinued operations.
Earnings/(loss) per share amounts for the quarters do not necessarily equal the respective year-end amounts
for earnings or loss per share due to the weighted-average number of shares outstanding used in the computations for
the respective periods. Earnings/(loss) per share amounts for the respective quarters and years have been computed
using the average number of common shares outstanding.
One of our largest sources of revenue is advertising. Our business has historically experienced higher
advertising volume in the fourth quarter than the remaining quarters because of holiday advertising.
(In thousands, except per share data)
Revenues
Operating costs
Headquarters redesign and consolidation(1)
Multiemployer pension and other contractual gain(2)
Operating profit
Other components of net periodic benefit costs
Gain/(loss) from joint ventures
Interest expense and other, net
Income from continuing operations before income
taxes
Income tax expense
Net income
Net (income)/loss attributable to the noncontrolling
interest
Net income attributable to The New York Times
Company common stockholders
Amounts attributable to The New York Times
Company common stockholders:
Income from continuing operations
Net income
Average number of common shares outstanding:
Basic
Diluted
Basic earnings per share attributable to The New
York Times Company common stockholders:
Net income
Diluted earnings per share attributable to The New
York Times Company common stockholders:
Net income
Dividends declared per share
2018 Quarters
April 1,
2018
(13 weeks)
July 1,
2018
(13 weeks)
September 30,
2018
(13 weeks)
December 30,
2018
(13 weeks)
Full Year
(52 weeks)
$
413,948 $
414,560 $
417,346 $
502,744 $
1,748,598
378,005
373,306
380,754
426,713
1,558,778
1,888
—
34,055
2,028
15
4,877
27,165
5,251
21,914
1,252
—
40,002
1,863
(8)
4,536
33,595
9,999
23,596
—
(4,851)
41,443
2,335
(16)
4,026
35,066
10,092
24,974
1,364
—
74,667
2,048
10,773
3,127
80,265
23,289
56,976
4,504
(4,851)
190,167
8,274
10,764
16,566
176,091
48,631
127,460
(2)
1
2
(1,777)
(1,776)
21,912 $
23,597 $
24,976 $
55,199 $
125,684
21,912 $
21,912 $
23,597 $
23,597 $
24,976 $
24,976 $
55,199 $
55,199 $
164,094
166,237
165,027
166,899
165,064
166,966
165,154
167,249
125,684
125,684
164,845
166,939
0.13 $
0.14 $
0.15 $
0.33 $
0.76
0.13 $
0.04 $
0.14 $
0.04 $
0.15 $
0.04 $
0.33 $
0.04 $
0.75
0.16
$
$
$
$
$
$
(1)
We recognized expenses related to the redesign and consolidation of space in our headquarters building.
(2) In the third quarter of 2018, the Company recorded a $4.9 million gain from a multiemployer pension plan liability adjustment.
P. 114 – THE NEW YORK TIMES COMPANY
(In thousands, except per share data)
Revenues
Operating costs(1)
Headquarters redesign and consolidation(2)
Multiemployer pension and other contractual gains(3)
Operating profit(1)
Other components of net periodic benefit (income)/
costs(1)
Gain/(loss) from joint ventures
Interest expense and other, net
Income from continuing operations before income
taxes
Income tax expense(4)
Income/(loss) from continuing operations
(Loss)/income from discontinued operations, net of
income taxes
Net income/(loss)
Net income attributable to the noncontrolling interest
Net income/(loss) attributable to The New York
Times Company common stockholders
Amounts attributable to The New York Times
Company common stockholders:
Income/(loss) from continuing operations
(Loss)/income from discontinued operations, net
of income taxes
Net income/(loss)
Average number of common shares outstanding:
Basic
Diluted
Basic earnings/(loss) per share attributable to The
New York Times Company common stockholders:
Income/(loss) from continuing operations
(Loss)/income from discontinued operations, net
of income taxes
Net income/(loss)
Diluted earnings/(loss) per share attributable to The
New York Times Company common stockholders:
Income/(loss) from continuing operations
(Loss)/income from discontinued operations, net
of income taxes
Net income/(loss)
Dividends declared per share
2017 Quarters
March 26,
2017
June 25,
2017
September 24,
2017
December 31,
2017
Full Year
(13 weeks)
(13 weeks)
(13 weeks)
(14 weeks)
(53 weeks)
$
398,804 $
407,074 $
385,635 $
484,126 $
1,675,639
368,587
2,402
—
27,815
(1,194)
173
5,325
23,857
10,742
13,115
—
13,115
66
378,613
351,273
394,805
1,493,278
1,985
—
26,476
(1,193)
(266)
5,133
22,270
6,711
15,559
—
15,559
40
2,542
—
31,820
(1,193)
31,557
4,660
59,910
23,420
36,490
(488)
36,002
(3,673)
3,161
(4,320)
90,480
67,805
(12,823)
4,665
5,187
63,083
(57,896)
57
(57,839)
1,026
10,090
(4,320)
176,591
64,225
18,641
19,783
111,224
103,956
7,268
(431)
6,837
(2,541)
13,181 $
15,599 $
32,329 $
(56,813) $
4,296
13,181 $
15,599 $
32,817 $
(56,870) $
4,727
—
—
(488)
57
13,181 $
15,599 $
32,329 $
(56,813) $
(431)
4,296
161,402
162,592
161,787
163,808
162,173
164,405
162,311
162,311
161,926
164,263
0.08 $
0.10 $
0.20 $
(0.35) $
—
0.08 $
—
0.10 $
—
0.20 $
—
(0.35) $
0.08 $
0.09 $
0.20 $
(0.35) $
—
0.08 $
0.04 $
—
0.09 $
— $
—
0.20 $
0.08 $
—
(0.35) $
0.04 $
0.03
—
0.03
0.03
—
0.03
0.16
$
$
$
$
$
$
$
$
(1) As a result of the adoption of ASU 2017-07 during the first quarter of 2018, the service cost component of net periodic benefit costs/(income)
from our pension and other postretirement benefits plans will continue to be presented within operating costs, while the other components of
net periodic benefits costs/(income) such as interest cost, amortization of prior service credit and gains or losses from our pension and other
postretirement benefits plans will be separately presented outside of “Operating costs” in the new line item “Other components of net periodic
benefits costs/(income)”. The Company has recast the Consolidated Statement of Operations for the first, second, third and fourth quarter of 2017
to conform with the current period presentation.
(2) We recognized expenses related to the redesign and consolidation of space in our headquarters building.
(3) In the fourth quarter of 2017, the Company recorded a gain of $4.3 million in connection with the settlement of contractual funding obligation.
(4) We recorded a $68.7 million charge in the fourth quarter of 2017 primarily attributable to the remeasurement of our net deferred tax assets
required as a result of tax legislation.
THE NEW YORK TIMES COMPANY – P. 115
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
ITEM 9A. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Our management, with the participation of our principal executive officer and our principal financial officer,
evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of
the Securities Exchange Act of 1934) as of December 30, 2018. Based upon such evaluation, our principal executive
officer and principal financial officer concluded that our disclosure controls and procedures were effective to ensure
that the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange
Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and
forms, and is accumulated and communicated to our management, including our principal executive officer and
principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management’s report on internal control over financial reporting and the attestation report of our independent
registered public accounting firm on our internal control over financial reporting are set forth in Item 8 of this Annual
Report on Form 10-K and are incorporated by reference herein.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal control over financial reporting during the quarter ended December 30,
2018, that have materially affected, or are reasonably likely to materially affect, our internal control over financial
reporting.
ITEM 9B. OTHER INFORMATION
Not applicable.
P. 116 – THE NEW YORK TIMES COMPANY
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
In addition to the information set forth under the caption “Executive Officers of the Registrant” in Part I of this
Annual Report on Form 10-K, the information required by this item is incorporated by reference to the sections titled
“Section 16(a) Beneficial Ownership Reporting Compliance,” “Proposal Number 1 — Election of Directors,” “Interests
of Related Persons in Certain Transactions of the Company,” “Board of Directors and Corporate Governance,”
beginning with the section titled “Independence of Directors,” but only up to and including the section titled “Board
Committees and Audit Committee Financial Experts,” “Board Committees” and “Nominating & Governance
Committee” of our Proxy Statement for the 2019 Annual Meeting of Stockholders.
The Board of Directors has adopted a code of ethics that applies to the principal executive officer, principal
financial officer and principal accounting officer. The current version of such code of ethics can be found on the
Corporate Governance section of our website at http://investors.nytco.com/investors/corporate-governance. We
intend to post any amendments to or waivers from the code of ethics that apply to our principal executive officer,
principal financial officer or principal accounting officer on our website.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated by reference to the sections titled “Compensation
Committee,” “Directors’ Compensation,” “Directors’ and Officers’ Liability Insurance” and “Compensation of
Executive Officers” of our Proxy Statement for the 2019 Annual Meeting of Stockholders.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The information required by this item is incorporated by reference to the sections titled “Principal Holders of
Common Stock,” “Security Ownership of Management and Directors” and “The 1997 Trust” of our Proxy Statement
for the 2019 Annual Meeting of Stockholders.
THE NEW YORK TIMES COMPANY – P. 117
Equity Compensation Plan Information
The following table presents information regarding our existing equity compensation plans as of December 30,
2018.
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
(a)
Weighted average
exercise price of
outstanding options,
warrants and rights
(b)
Number of securities
remaining
available for future
issuance under equity
compensation plans
(excluding securities
reflected in column (a))
(c)
Plan category
Equity compensation plans approved by security
holders
Stock-based awards
4,174,009 (1)
$
9.40 (2)
Employee Stock Purchase Plan
Total
Equity compensation plans not approved by security
holders
—
4,174,009
None
—
—
None
7,404,447 (3)
6,409,741 (4)
13,814,188
None
(1)
(2)
(3)
(4)
Includes (i) 1,388,288 shares of Class A stock to be issued upon the exercise of outstanding stock options granted under the 1991 Incentive
Plan, the 2010 Incentive Plan, and the 2004 Non-Employee Directors’ Stock Incentive Plan, at a weighted-average exercise price of $9.40 per
share, and with a weighted-average remaining term of 2 years; (ii) 623,051 shares of Class A stock issuable upon the vesting of outstanding
stock-settled restricted stock units granted under the 2010 Incentive Plan; (iii) 153,503 shares of Class A stock related to vested stock-settled
restricted stock units granted under the 2010 Incentive Plan issuable to non-employee directors upon retirement from the Board; and (iv)
2,009,167, shares of Class A stock that would be issuable at maximum performance pursuant to outstanding stock-settled performance
awards under the 2010 Incentive Plan. Under the terms of the performance awards, shares of Class A stock are to be issued at the end of
three-year performance cycles based on the Company’s achievement against specified performance targets. The shares included in the table
represent the maximum number of shares that would be issued under the outstanding performance awards; assuming target performance,
the number of shares that would be issued under the outstanding performance awards is 1,004,584.
Excludes shares of Class A stock issuable upon vesting of stock-settled restricted stock units and shares issuable pursuant to stock-settled
performance awards.
Includes shares of Class A stock available for future stock options to be granted under the 2010 Incentive Plan. As of December 30, 2018, the
2010 Incentive Plan had 7,404,447 shares of Class A stock remaining available for issuance upon the grant, exercise or other settlement of
stock-based awards. Stock options granted under the 2010 Incentive Plan must provide for an exercise price of 100% of the fair market value
(as defined in the 2010 Incentive Plan) on the date of grant. The 2004 Non-Employee Directors’ Stock Incentive Plan terminated on April 30,
2014.
Includes shares of Class A stock available for future issuance under the Company’s Employee Stock Purchase Plan (“ESPP”). We have not
had an offering under the ESPP since 2010.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
The information required by this item is incorporated by reference to the sections titled “Interests of Related
Persons in Certain Transactions of the Company,” “Board of Directors and Corporate Governance — Independence of
Directors” and “Board of Directors and Corporate Governance — Board Committees and Audit Committee Financial
Experts” of our Proxy Statement for the 2019 Annual Meeting of Stockholders.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this item is incorporated by reference to the section titled “Proposal Number 3 —
Selection of Auditors,” beginning with the section titled “Audit Committee’s Pre-Approval Policies and Procedures,”
but only up to and not including the section titled “Recommendation and Vote Required” of our Proxy Statement for
the 2019 Annual Meeting of Stockholders.
P. 118 – THE NEW YORK TIMES COMPANY
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(A) DOCUMENTS FILED AS PART OF THIS REPORT
(1) Financial Statements
As listed in the index to financial information in “Item 8 — Financial Statements and Supplementary Data.”
(2) Supplemental Schedules
The following additional consolidated financial information is filed as part of this Annual Report on Form 10-K
and should be read in conjunction with the Consolidated Financial Statements set forth in “Item 8 — Financial
Statements and Supplementary Data.” Schedules not included with this additional consolidated financial information
have been omitted either because they are not applicable or because the required information is shown in the
Consolidated Financial Statements.
Consolidated Schedule for the Three Years Ended December 30, 2018
II – Valuation and Qualifying Accounts
Page
113
Separate financial statements of associated companies accounted for by the equity method are omitted in
accordance with permission granted by the Securities and Exchange Commission pursuant to Rule 3-13 of Regulation
S-X.
(3) Exhibits
The exhibits listed in the accompanying index are filed as part of this report.
THE NEW YORK TIMES COMPANY – P. 119
INDEX TO EXHIBITS
Exhibit numbers 10.18 through 10.26 are management contracts or compensatory plans or arrangements.
Exhibit
Number
(3.1)
(3.2)
(4)
(4.1)
(10.1)
(10.2)
(10.3)
(10.4)
(10.5)
(10.6)
(10.7)
(10.8)
(10.9)
(10.10)
(10.11)
(10.12)
(10.13)
(10.14)
Description of Exhibit
Certificate of Incorporation as amended and restated to reflect amendments effective July 1, 2007 (filed as an Exhibit
to the Company’s Form 10-Q dated August 9, 2007, and incorporated by reference herein).
By-laws as amended effective January 1, 2018 (filed as an Exhibit to the Company’s Form 8-K dated December 14,
2017, and incorporated by reference herein).
The Company agrees to furnish to the Commission upon request a copy of any instrument with respect to long-
term debt of the Company and any subsidiary for which consolidated or unconsolidated financial statements are
required to be filed, and for which the amount of securities authorized thereunder does not exceed 10% of the total
assets of the Company and its subsidiaries on a consolidated basis.
Securities Purchase Agreement, dated January 19, 2009, among the Company, Inmobiliaria Carso, S.A. de C.V. and
Banco Inbursa S.A., Institución de Banca Múltiple, Grupo Financiero Inbursa (including forms of notes, warrants
and registration rights agreement) (filed as an Exhibit to the Company’s Form 8-K dated January 21, 2009, and
incorporated by reference herein).
Agreement of Lease, dated as of December 15, 1993, between The City of New York, as landlord, and the Company,
as tenant (as successor to New York City Economic Development Corporation (the “EDC”), pursuant to an
Assignment and Assumption of Lease With Consent, made as of December 15, 1993, between the EDC, as Assignor,
to the Company, as Assignee) (filed as an Exhibit to the Company’s Form 10-K dated March 21, 1994, and
incorporated by reference herein).
Funding Agreement #4, dated as of December 15, 1993, between the EDC and the Company (filed as an Exhibit to
the Company’s Form 10-K dated March 21, 1994, and incorporated by reference herein).
New York City Public Utility Service Power Service Agreement, dated as of May 3, 1993, between The City of New
York, acting by and through its Public Utility Service, and The New York Times Newspaper Division of the Company
(filed as an Exhibit to the Company’s Form 10-K dated March 21, 1994, and incorporated by reference herein).
Letter Agreement, dated as of April 8, 2004, amending Agreement of Lease, between the 42nd St. Development
Project, Inc., as landlord, and The New York Times Building LLC, as tenant (filed as an Exhibit to the Company’s
Form 10-Q dated November 3, 2006, and incorporated by reference herein).
Agreement of Sublease, dated as of December 12, 2001, between The New York Times Building LLC, as landlord,
and NYT Real Estate Company LLC, as tenant (filed as an Exhibit to the Company’s Form 10-Q dated November
3, 2006, and incorporated by reference herein).
First Amendment to Agreement of Sublease, dated as of August 15, 2006, between 42nd St. Development Project,
Inc., as landlord, and NYT Real Estate Company LLC, as tenant (filed as an Exhibit to the Company’s Form 10-Q
dated November 3, 2006, and incorporated by reference herein).
Second Amendment to Agreement of Sublease, dated as of January 29, 2007, between 42nd St. Development Project,
Inc., as landlord, and NYT Real Estate Company LLC, as tenant (filed as an Exhibit to the Company’s Form 8-K
dated February 1, 2007, and incorporated by reference herein).
Third Amendment to Agreement of Sublease (NYT), dated as of March 6, 2009, between 42nd St. Development
Project, Inc., as landlord, and NYT Real Estate Company LLC, as tenant (filed as an Exhibit to the Company’s Form
8-K dated March 9, 2009, and incorporated by reference herein).
Fourth Amendment to Agreement of Sublease (NYT), dated as of March 6, 2009, between 42nd St. Development
Project, Inc., as landlord, and 620 Eighth NYT (NY) Limited Partnership, as tenant (filed as an Exhibit to the
Company’s Form 8-K dated March 9, 2009, and incorporated by reference herein).
Fifth Amendment to Agreement of Sublease (NYT), dated as of August 31, 2009, between 42nd St. Development
Project, Inc., as landlord, and 620 Eighth NYT (NY) Limited Partnership, as tenant (filed as an Exhibit to the
Company’s Form 10-Q dated November 4, 2009, and incorporated by reference herein).
Agreement of Sublease (NYT-2), dated as of March 6, 2009, between 42nd St. Development Project, Inc., as landlord,
and NYT Real Estate Company LLC, as tenant (filed as an Exhibit to the Company’s Form 8-K dated March 9, 2009,
and incorporated by reference herein).
First Amendment to Agreement of Sublease (NYT-2), dated as of March 6, 2009, between 42nd St. Development
Project, Inc., as landlord, and NYT Building Leasing Company LLC, as tenant (filed as an Exhibit to the Company’s
Form 8-K dated March 9, 2009, and incorporated by reference herein).
Agreement of Purchase and Sale, dated as of March 6, 2009, between NYT Real Estate Company LLC, as seller, and
620 Eighth NYT (NY) Limited Partnership, as buyer (filed as an Exhibit to the Company’s Form 8-K dated March
9, 2009, and incorporated by reference herein).
Lease Agreement, dated as of March 6, 2009, between 620 Eighth NYT (NY) Limited Partnership, as landlord, and
NYT Real Estate Company LLC, as tenant (filed as an Exhibit to the Company’s Form 8-K dated March 9, 2009,
and incorporated by reference herein).
P. 120 – THE NEW YORK TIMES COMPANY
Exhibit
Number
(10.15)
(10.16)*
(10.17)*
(10.18)
(10.19)
(10.20)
(10.21)
(10.22)
(10.23)
(10.24)
(10.25)
(10.26)
(21)
(23.1)
(24)
(31.1)
(31.2)
(32.1)
(32.2)
(101.INS)
Description of Exhibit
First Amendment to Lease Agreement, dated as of August 31, 2009, 620 Eighth NYT (NY) Limited Partnership, as
landlord, and NYT Real Estate Company LLC, as tenant (filed as an Exhibit to the Company’s Form 10-Q dated
November 4, 2009, and incorporated by reference herein).
Letter Agreement, dated as of October 18, 2017, between the Company and Massachusetts Mutual Life Insurance
Company (filed as an Exhibit to the Company’s Form 10-K dated February 27, 2018, and incorporated by reference
herein).
Letter Agreement, dated as of October 18, 2017, between the Company and Massachusetts Mutual Life Insurance
Company (filed as an Exhibit to the Company’s Form 10-K dated February 27, 2018, and incorporated by reference
herein).
The Company’s 2010 Incentive Compensation Plan, as amended and restated effective April 30, 2014 (filed as an
exhibit to the Company’s Form 8-K dated April 30, 2014, and incorporated by reference herein).
Form of Restricted Stock Unit Award Agreement under the Company’s 2010 Incentive Compensation Plan (filed
as an Exhibit to the Company’s Form 10-K dated February 22, 2017, and incorporated by reference herein).
The Company’s 1991 Executive Stock Incentive Plan, as amended and restated through October 11, 2007 (filed as
an Exhibit to the Company’s Form 8-K dated October 12, 2007, and incorporated by reference herein).
The Company’s Supplemental Executive Retirement Plan, as amended and restated effective January 1, 2015 (filed
as an Exhibit to the Company’s Form 10-Q dated November 4, 2015, and incorporated by reference herein).
The Company’s Deferred Executive Compensation Plan, as amended and restated effective January 1, 2015 (filed
as an Exhibit to the Company’s Form 10-Q dated November 4, 2015, and incorporated by reference herein).
The Company’s 2004 Non-Employee Directors’ Stock Incentive Plan, effective April 13, 2004 (filed as an Exhibit to
the Company’s Form 10-Q dated May 5, 2004, and incorporated by reference herein).
The Company’s Non-Employee Directors Deferral Plan, as amended through October 11, 2007 (filed as an Exhibit
to the Company’s Form 8-K dated October 12, 2007, and incorporated by reference herein).
The Company’s Savings Restoration Plan, amended and restated effective February 19, 2015 (filed as an Exhibit to
the Company’s Form 10-Q filed November 4, 2015, and incorporated by reference herein).
The Company’s Supplemental Executive Savings Plan, amended and restated effective February 19, 2015 (filed as
an Exhibit to the Company’s Form 10-Q filed November 4, 2015, and incorporated by reference herein).
Subsidiaries of the Company.
Consent of Ernst & Young LLP.
Power of Attorney (included as part of signature page).
Rule 13a-14(a)/15d-14(a) Certification.
Rule 13a-14(a)/15d-14(a) Certification.
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
XBRL Instance Document.
(101.SCH)
XBRL Taxonomy Extension Schema Document.
(101.CAL)
XBRL Taxonomy Extension Calculation Linkbase Document.
(101.DEF)
XBRL Taxonomy Extension Definition Linkbase Document.
(101.LAB)
XBRL Taxonomy Extension Label Linkbase Document.
(101.PRE)
XBRL Taxonomy Extension Presentation Linkbase Document.
* Portions of this exhibit (indicated by asterisks) have been omitted and are subject to a confidential treatment order granted by the SEC pursuant
to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
ITEM 16. FORM 10-K SUMMARY
None.
THE NEW YORK TIMES COMPANY – P. 121
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: February 26, 2019
THE NEW YORK TIMES COMPANY
(Registrant)
BY: /s/ Roland A. Caputo
Roland A. Caputo
Executive Vice President and Chief Financial Officer
We, the undersigned directors and officers of The New York Times Company, hereby severally constitute Diane
Brayton and Roland A. Caputo, and each of them singly, our true and lawful attorneys with full power to them and
each of them to sign for us, in our names in the capacities indicated below, any and all amendments to this Annual
Report on Form 10-K filed with the Securities and Exchange Commission.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
/s/ Mark Thompson
/s/ Roland A. Caputo
/s/ R. Anthony Benten
Chief Executive Officer, President and Director
(principal executive officer)
Executive Vice President and Chief Financial Officer
(principal financial officer)
Senior Vice President, Treasurer and Corporate Controller
(principal accounting officer)
/s/ A.G. Sulzberger
Publisher and Director
/s/ Arthur Sulzberger, Jr.
Chairman of the Board
/s/ Amanpal S. Bhutani
Director
/s/ Robert E. Denham
/s/ Rachel Glaser
/s/ Hays N. Golden
/s/ Steven B. Green
/s/ Joichi Ito
/s/ James A. Kohlberg
Director
Director
Director
Director
Director
Director
/s/ Brian P. McAndrews
Director
/s/ John W. Rogers, Jr.
/s/ Doreen Toben
/s/ Rebecca Van Dyck
Director
Director
Director
P. 122 – THE NEW YORK TIMES COMPANY
Date
February 26, 2019
February 26, 2019
February 26, 2019
February 26, 2019
February 26, 2019
February 26, 2019
February 26, 2019
February 26, 2019
February 26, 2019
February 26, 2019
February 26, 2019
February 26, 2019
February 26, 2019
February 26, 2019
February 26, 2019
February 26, 2019
EXHIBIT 21
Our Subsidiaries*
Name of Subsidiary
The New York Times Company
Fake Love LLC
Hello Society, LLC
Madison Paper Industries (partnership) (40%)
New York Times Canada Ltd.
New York Times Digital LLC
Northern SC Paper Corporation (80%)
NYT Administradora de Bens e Servicos Ltda.
NYT Building Leasing Company LLC
NYT Capital, LLC
Midtown Insurance Company
NYT Shared Service Center, Inc.
International Media Concepts, Inc.
The New York Times Distribution Corporation
The New York Times Sales Company
The New York Times Syndication Sales Corporation
NYT Group Services, LLC
NYT International LLC
New York Times Limited
New York Times (Zürich) GmbH
NYT B.V.
NYT France S.A.S.
International Herald Tribune U.S. Inc.
New York Times France-Kathimerini Commercial S.A. (50%)
The Herald Tribune - Ha’aretz Partnership (50%)
NYT Germany GmbH
NYT Hong Kong Limited
Beijing Shixun Zhihua Consulting Co. LTD.
NYT Japan GK
NYT Singapore PTE. LTD.
NYT News Bureau (India) Private Limited
NYT Real Estate Company LLC
The New York Times Building LLC (58%)
Rome Bureau S.r.l.
The New York Times Company Pty Limited
Wirecutter, Inc.
* 100% owned unless otherwise indicated.
Jurisdiction of
Incorporation or
Organization
New York
Delaware
Delaware
Maine
Canada
Delaware
Delaware
Brazil
New York
Delaware
New York
Delaware
Delaware
Delaware
Massachusetts
Delaware
Delaware
Delaware
United Kingdom
Switzerland
Netherlands
France
New York
Greece
Israel
Germany
Hong Kong
People’s Republic of
China
Japan
Singapore
India
New York
New York
Italy
Australia
Delaware
EXHIBIT 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in Registration Statements No. 333-43369, No. 333-43371, No.
333-37331, No. 333-09447, No. 33-31538, No. 33-43210, No. 33-43211, No. 33-50465, No. 33-50467, No. 33-56219, No.
333-49722, No. 333-70280, No. 333-102041, No. 333-114767, No. 333-166426 and No. 333-195731 on Form S-8, and
Registration Statement No. 333-216182 on Form S-3 of The New York Times Company of our reports
dated February 26, 2019 with respect to the consolidated financial statements and schedule of The New York Times
Company and the effectiveness of internal control over financial reporting of The New York Times Company,
included in this Annual Report (Form 10-K) for the fiscal year ended December 30, 2018.
/s/ Ernst & Young LLP
New York, New York
February 26, 2019
EXHIBIT 31.1
Rule 13a-14(a)/15d-14(a) Certification
I, Mark Thompson, certify that:
1.
I have reviewed this Annual Report on Form 10-K of The New York Times Company;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of,
and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the
period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s
internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of
directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant’s internal control over financial reporting.
Date: February 26, 2019
/s/ MARK THOMPSON
Mark Thompson
Chief Executive Officer
EXHIBIT 31.2
Rule 13a-14(a)/15d-14(a) Certification
I, Roland A. Caputo, certify that:
1.
I have reviewed this Annual Report on Form 10-K of The New York Times Company;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of,
and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the
period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s
internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of
directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant’s internal control over financial reporting.
Date: February 26, 2019
/s/ ROLAND A. CAPUTO
Roland A. Caputo
Chief Financial Officer
EXHIBIT 32.1
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
In connection with the Annual Report on Form 10-K of The New York Times Company (the “Company”) for the
year ended December 30, 2018, as filed with the Securities and Exchange Commission on the date hereof (the
“Report”), I, Mark Thompson, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, based on my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934;
and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results
of operations of the Company.
February 26, 2019
/s/ MARK THOMPSON
Mark Thompson
Chief Executive Officer
EXHIBIT 32.2
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
In connection with the Annual Report on Form 10-K of The New York Times Company (the “Company”) for the
year ended December 30, 2018, as filed with the Securities and Exchange Commission on the date hereof (the
“Report”), I, Roland A. Caputo, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, based on my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934;
and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results
of operations of the Company.
February 26, 2019
/s/ ROLAND A. CAPUTO
Roland A. Caputo
Chief Financial Officer
Board of Directors
Amanpal S. Bhutani
President
Brand Expedia Group
Expedia Group, Inc.
Robert E. Denham
Partner
Munger, Tolles & Olson LLP
Rachel Glaser
Chief Financial Officer
Etsy, Inc.
Hays N. Golden
Senior Director for
Science and Strategy
Crime Lab New York
University of Chicago
Steven B. Green
General Partner
Ordinance Capital L.P.
Joichi Ito
Director
Media Lab
Massachusetts Institute
of Technology
James A. Kohlberg
Co-Founder and Chairman
Kohlberg & Company
Brian P. McAndrews
Former President, C.E.O.
and Chairman
Pandora Media, Inc.
Mark Thompson
President and C.E.O.
The New York Times
Company
John W. Rogers, Jr.
Founder, Chairman, C.E.O. and
C.I.O.
Ariel Investments, LLC
Doreen Toben
Former Executive Vice
President and C.F.O.
Verizon Communications, Inc.
A.G. Sulzberger
Publisher
The New York Times
Arthur O. Sulzberger Jr.
Chairman of the Board
The New York Times
Company
Rebecca Van Dyck
Chief Marketing Officer
AR/VR
Facebook, Inc.
Shareholder Information Online
investors.nytco.com
Visit our website for corporate governance information about the
Company, including the Code of Ethics for our C.E.O. and senior financial
officers and our Business Ethics Policy.
Career Opportunities
Employment applicants should apply online at www.nytco.com/careers.
The Company is committed to a policy of providing equal employment
opportunities without regard to race, color, religion, national origin,
ancestry, gender, age, marital status, sexual orientation, disability, military
or veteran status or any other characteristic covered by law.
Office of the Secretary
(212) 556-5995
Corporate Communications and Investor Relations
(212) 556-4317
Stock Listing
The Company’s Class A Common Stock is listed on the New York
Stock Exchange. Ticker symbol: NYT
Registrar and Transfer Agent
If you are a registered shareholder and have a question about your
account, or would like to report a change in your name or address,
please contact:
Computershare
P.O. Box 505000
Louisville, KY 40233-5000
Overnight correspondence should be mailed to:
Computershare
462 South 4th Street, Suite 1600
Louisville, KY 40202
Shareholder Website
www.computershare.com/investor
Shareholder online inquiries
https://www-us.computershare.com/investor/contact
Domestic: (800) 240-0345; TDD Line: (800) 231-5469
Foreign: (201) 680-6578; TDD Line: (201) 680-6610
Annual Meeting
Thursday, May 2, 2019 at 9 a.m.
The New York Times Building
620 Eighth Ave., 15th Floor
New York, NY 10018
Auditors
Ernst & Young LLP
5 Times Square
New York, NY 10036
Forward-Looking Statements
This Annual Report contains forward-looking statements that relate
to future events or our future financial performance. By their nature,
forward-looking statements are subject to risks and uncertainties that
could cause actual results to differ materially from those anticipated in any
such statements. You should bear this in mind as you consider forward-
looking statements. Factors that we think could, individually or in the
aggregate, cause our actual results to differ materially from expected and
historical results include those described in the “Risk Factors” section of
this Annual Report, as well as other risks detailed from time to time in
the Company’s publicly filed documents. The Company undertakes no
obligation to publicly update any forward-looking statement, whether as a
result of new information, future events or otherwise.
Copyright 2019
The New York Times Company
All rights reserved.
OUR VALUES
Independence Over a hundred years ago,
The Times pledged “to give the news impartially,
without fear or favor, regardless of party, sect or
interests involved.” That commitment remains
true today: We follow the truth, wherever it leads.
Integrity The trust of our readers is essential.
We renew that trust every day through the
actions and judgment of all our employees — in our
journalism, in our workplace and in public.
Curiosity Open-minded inquiry is at the
heart of our mission. In all our work, we believe
in continually asking questions, seeking out
different perspectives and searching for better
ways of doing things.
Respect We help a global audience understand
a vast and diverse world. To do that fully and
fairly, we treat our subjects, our readers and each
other with empathy and respect.
Collaboration It takes creativity and
expertise from people in every part of the company
to fulfill our mission. We are at our best when
we work together and support each other.
Excellence We aim to set the standard in
everything we do. The pursuit of excellence takes
different forms, but in every context, we strive
to deliver the very best.
620 Eighth Avenue
New York, N.Y. 10018
Tel 212 556 1234
The New York Times Company
2018 Annual Report
OUR MISSION
We seek the truth
and help people
understand the world.
This mission is rooted in our belief that great
journalism has the power to make each reader’s
life richer and more fulfilling, and all of society
stronger and more just.